Pipeline Productions, Inc. v. The Madison Companies, LLC, et al

Filing 476

MEMORANDUM AND ORDER granting in part and denying in part 441 Motion to Compel. Defendants shall produce unredacted copies of the documents sent to or received by Marcee Rondan (Privilege Log Entry Nos. 126, 129, 130, 132, 139-148) on or before May 3, 2019. Signed by Magistrate Judge Angel D. Mitchell on 4/29/2019. (bh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
PIPELINE PRODUCTIONS, INC., et al.,
Plaintiffs and
Counterclaim Defendants,
v.
THE MADISON COMPANIES, LLC, et al.,
Defendants and
Counterclaimants.

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Case No. 15-4890-KHV

MEMORANDUM AND ORDER
This matter comes before the court on Plaintiffs’ Renewed Motion to Compel Suzanne
Land Documents (ECF No. 441). Therein, plaintiffs Pipeline Productions, Inc., Backwood
Enterprises, LLC, OK Productions, Inc., and Brent Mosiman (collectively “Pipeline”) renew their
motion to compel defendants The Madison Companies, LLC and Horsepower Entertainment, LLC
(collectively “Madison”) to produce documents to and from Suzanne Land found on Madison’s
July 5 and 6 privilege logs. For the reasons set forth below, the court grants Pipeline’s motion as
to Privilege Log Entry Nos. 126, 129, 130, 132, 139-148. The court also grants the motion insofar
as it has conducted an in camera inspection of Defendants’ Privilege Log Entry Nos. 127 and 134136. The motion is denied in all other respects.
I.

BACKGROUND
The court has previously summarized the facts giving rise to this case. See Pipeline Prod.,

Inc. v. Madison Cos., LLC, No. 15-4890-KHV, 2019 WL 1206786, at *1 (D. Kan. Mar. 14, 2019).
The case arises out of the parties’ business dealings relating to the Thunder on the Mountain
country music festival (“Thunder”) in 2015. According to the Complaint, Pipeline is a well-known

producer of live music festivals, including Thunder. Madison is a venture capital firm that was
looking to invest in Pipeline’s music festival business. In 2014-2015, the parties engaged in
various business dealings trying to structure a deal, but that deal fell through shortly before the
Thunder festival was scheduled to occur in 2015. Pipeline was financially devastated, was forced
to cancel Thunder 2015, and filed this lawsuit. In this lawsuit, the parties dispute whether and the
extent to which they incurred legally binding obligations to one another before the deal fell
through. Pipeline asserts claims for breach of contract, breach of fiduciary duty, fraud, and tortious
interference. Madison seeks a refund of the money it advanced for Thunder 2015.
Pipeline previously moved to compel Madison to produce the documents at issue in this
motion to compel. (ECF No. 302.) At the time, this case was assigned to U.S. Magistrate Judge
K. Gary Sebelius, who denied Pipeline’s motion without prejudice to refiling a renewed motion
directed to this particular category of documents. See Pipeline Prod., Inc., No. 15-4890-KHV,
2019 WL 1206786, at *3. Since then, Madison produced certain documents, narrowed its claim
of privilege to 154 documents, and served a supplemental privilege log and supporting
declarations. Pipeline now moves to compel Madison to produce the remaining documents that
appear on the supplemental privilege log. The subject documents all involve Ms. Land, who was
at all relevant times an independent contractor of Madison.
Pipeline’s arguments are essentially threefold.1 First, Pipeline argues Madison waived the
attorney-client privilege as to all of the documents by including Ms. Land in the communications

1

The privilege log contains three types of objections. Madison withheld all documents based
on an attorney-client privilege objection, withheld a smaller category of those documents based on
attorney work product, and redacted account numbers in seven sets of documents based on a
“confidentiality objection.” Madison’s response does not address its confidentiality or workproduct objections, so the court will not address them either. See Black & Veatch Corp. v. Aspen
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because she was an independent contractor, not an agent or employee. Second, Pipeline argues
Madison should be compelled to produce 14 of the documents that include Marcee Rondon
because (1) Madison waived privilege because Ms. Rondon is an outside public relations executive
and/or (2) these communications were not made for the purpose of giving or receiving legal advice.
Third, Pipeline argues Madison has not provided sufficient information to enable Pipeline to
evaluate Madison’s privilege claims as to four sets of documents that include the subject line of
the “Kaaboo Del Mar” music festival.2
II.

LEGAL STANDARD
FED. R. EVID. 501 provides that “state law governs privilege regarding a claim or defense

for which state law supplies the rule of decision.” FED. R. EVID. 501; Frontier Refining, Inc. v.
Gorman-Rupp Co., Inc, 136 F.3d 695, 699 (10th Cir. 1998). In this case, the court has diversity
jurisdiction over common law claims, which are governed by Kansas law. Therefore, Kansas law
applies to the privilege claims at issue.
In Kansas, the attorney-client privilege is codified at KAN. STAT. ANN. § 60-426. Under
the statute, with few exceptions, “communications found by the judge to have been between a
lawyer and his or her client in the course of that relationship and in professional confidence, are
privileged.” See State v. Gonzalez, 234 P.3d 1, 10 (Kan. 2010). The party asserting attorney-client
privilege bears the burden to establish that it applies. In re Grand Jury Proceedings, 616 F.3d

Ins. (UK) Ltd., 297 F.R.D. 611, 614 (D. Kan. Feb. 28, 2014) (objections not supported in response
to a motion to compel are deemed abandoned).
Madison also argues that certain portions of Pipeline’s motion to compel are untimely,
constitute inappropriate attempts to reconsider Judge Sebelius’ prior discovery orders, or that
Pipeline failed to meet and confer about certain issues. The undersigned overruled these objections
during the final pretrial conference on April 9, 2019, for the reasons stated on the record.
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1172, 1183 (10th Cir. 2010); Cypress Media, Inc. v. City of Overland Park, 997 P.2d 681, 693
(Kan. 2000). This burden includes showing the privilege has not been waived. See Johnson v.
Gmeinder, 191 F.R.D. 638, 642 (D. Kan. 2000).
III.

ANALYSIS
To support Madison’s privilege claims, it submitted a privilege log (ECF No. 441-1) and

affidavits from defense counsel Benjamin Scheibe (ECF No. 444-1), Ms. Land (ECF No. 441-2),
and Bryan Gordon, who is Madison’s chairman and CEO (ECF No. 330-6). Madison also
submitted the documents that are the subject of the motion to compel for in camera inspection, but
the court finds it largely unnecessary to review those documents for purposes of assessing
Madison’s privilege claims. The court has therefore reviewed and considered the documents
submitted for in camera review only to the extent expressly set forth below.
A.

Documents Involving Ms. Land3

All of Madison’s privilege log entries include documents sent to or received by Ms. Land.
Pipeline argues that including Ms. Land in these communications waived privilege because she
was an independent contractor of Madison. Pipeline focuses on the language in her Independent
Contractor Agreement that provides that she “does not have the authority to act for Madison, or to
bind Madison in any respect whatsoever.”4 (ECF No. 442-2 ¶ 10, at 3.) Pipeline also argues that
Ms. Land was not the functional equivalent of an employee, and therefore her inclusion on the
emails waives the privilege.

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Ms. Land is also known as Suzanne Bowman.

Pipeline points out that Ms. Land’s Agreement with Madison provides that she “will not
provide legal services to Madison or practice law for or on behalf of Madison.” (ECF No. 442-2,
at 1.) But Madison states it is not asserting Ms. Land was present in these communications in her
capacity as an attorney, but rather as a representative of the “client”—i.e., on Madison’s behalf.
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KAN. STAT. ANN. § 60-426(c)(1) defines the “Client” for purposes of the attorney-client
privilege to include “a corporation or other association that, directly or through an authorized
representative, consults an attorney . . . for the purpose of . . . securing legal advice from the
attorney in a professional capacity.” Kansas courts have not construed the scope of “authorized
representative” as it applies to non-employee consultants. However, by the statute’s plain terms,
“client” includes a representative who is authorized by the corporation to “consult[] an attorney .
. . for the purpose of . . . securing legal advice” for the corporation. Thus, contrary to Pipeline’s
arguments, the statute does not distinguish between a corporation’s agents and employees, versus
its independent consultants, so long as the corporation authorizes the individual to consult with the
attorney to secure professional advice for the corporation.
Pipeline’s argument attempting to distinguish between an employee and an independent
contractor is also contrary to the leading circuit-level authority on this issue—In re Bieter
Company, 16 F.3d 929 (8th Cir. 1994). In that case, the magistrate judge ruled that an independent
contractor’s communications with the client’s attorney were not privileged because he was not an
employee. Id. at 931, 933, 941. On appeal, the Eighth Circuit granted the extraordinary remedy
of a writ of mandamus, vacating the district court’s order and holding that “when applying the
attorney-client privilege to a corporation or partnership, it is inappropriate to distinguish between
those on the client’s payroll and those who are instead and for whatever reason employed as
independent contractors.” Id. at 937. The court reasoned that this distinction was inappropriate
because non-employee representatives may have the “very sort of information that the privilege
envisions flowing most freely,” which is the information the corporation’s attorneys need in order
to adequately advise the client. Id. at 937-38. The court finds this reasoning persuasive, and
consistent with the applicable Kansas statute.

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Madison has met its burden to prove that Pipeline authorized Ms. Land to consult with
attorneys to secure legal advice for the corporation. Madison submitted a detailed factual record
that establishes Ms. Land was an authorized representative for purposes of seeking and receiving
the legal advice at issue. Mr. Gordon’s affidavit explains that he brought Ms. Land on board in
the winter of 2014-2015 as his “right hand person” to oversee negotiating certain proposed
business transactions, including the dealings with Pipeline that are the subject of this litigation.
According to Mr. Gordon, Ms. Land took the lead on certain due diligence aspects of the
transaction, including those involving real estate and alcohol permits. He authorized and asked
Ms. Land to communicate with counsel and other Madison representatives in order to obtain
information needed or requested by Madison’s attorneys, he authorized Ms. Land to act in this
capacity as Madison’s representative, and he relied upon her to do so. When Pipeline withdrew
from the proposed transaction, Ms. Land interfaced with Madison’s counsel regarding litigation
between the parties. Ms. Land’s affidavit confirms the salient facts and provides further details.
She elaborates that she worked as a project manager on the companies’ corporate transactions,
including working with Madison’s in-house and outside counsel. This included working with
counsel on various aspects of the Thunder transaction. After litigation ensued between Madison
and Pipeline, Ms. Land spoke to the Pipeline principals to attempt to resolve the dispute and
communicated with counsel about the pending lawsuits. Based on this record, there is no
principled basis to find that Ms. Land was not acting as an authorized representative in seeking
legal advice for Pipeline, regardless of whether she was an independent consultant.
Pipeline’s arguments to the contrary are without merit. Pipeline mainly argues that Ms.
Land was not the “functional equivalent of an in-house employee” under Abu Dhabi Commercial
Bank v. Morgan Stanley & Co., Inc., No. 08 Civ. 7508, 2011 WL 4716334 (S.D.N.Y Oct. 4, 2011).

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But Abu Dhabi is not binding on this court, nor is it persuasive. There, the Special Master cited
New York law for its version of the functional-equivalent test.5 Id. at *3 n.23 (relying on ExportImport Bank of the U.S. v. Asia Pulp & Paper Co., Ltd. 232 F.R.D. 103, 113 (S.D.N.Y. 2005)).
New York law does not apply here. Kansas law does, and Pipeline does not cite or discuss the
governing Kansas statute. Furthermore, the Special Master in Abu Dhabi found the evidence was
insufficient to establish the third party was the functional equivalent of an employee, but the party
advocating privilege presented no affidavits in support of its position. Id. at *5 n.50. That is unlike
this case, where Madison presented detailed factual affidavits supporting its privilege claim.
Pipeline also relies on Stallings v. Werner Enterprises, Inc., where the court found an
independent contractor was not an authorized representative for purposes of the attorney-client
privilege. No. 07-1387-WEB, 2008 WL 4078783, at *2 (D. Kan. Aug. 28, 2008). But Stallings
merely stands for the proposition that the existence of privilege is determined on a case-by-case
basis, based on the facts presented. There, communications with the independent contractor were
not privileged not only because he was an independent contractor, but also because (1) there was
no evidence that he was retained to provide advice or expertise to in-house attorneys, but rather

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Courts applying the functional-equivalent test have adopted varying constructions, with Abu
Dhabi representing the narrower application. Under that approach, the court considers whether the
consultant was responsible for a key corporate job; the nature of the working relationship between
the consultant and the principals, including whether the relationship was critical to the company’s
position in litigation; and whether the consultant possessed information not held by others in the
company. Other courts have declined to apply these factors, opting instead for “a broad practical
approach” that considers whether the consultant acts for the corporation and possesses the
information needed to so that the attorney may render legal advice. See, e.g., In re Flonase
Antitrust Litig., 879 F. Supp. 2d 454, 459-60 (E.D. Pa. 2012); see also United States v. Ormat
Indus., Ltd., No. 3:14-cv-00325-RJC-VPC, 2016 WL 4107682, at *7 (D. Nev. Aug. 1, 2016)
(recognizing the disagreement). Notably, the circuit courts that have adopted the functionalequivalent test have not set forth the same criteria considered in Abu Dhabi. See United States v.
Graf, 610 F.3d 1148, 1158-59 (9th Cir. 2010); In re Bieter Co., 16 F.3d at 937-38.
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was merely one of a number of fact witnesses to an accident, and (2) there was no evidence that
he was aware that his communications with counsel were confidential in nature. Id. at *3-*4.
Unlike the independent contractor in that case, the very nature of Ms. Land’s role involved
consulting with counsel on Madison’s behalf about the relevant legal matters in question. Stallings
is therefore merely consistent with other judges in this District who, applying Kansas law, have
resolved the issue on a case-by-case basis by analyzing the factual record in a particular case. See,
e.g., In re Syngenta AG MIR 162 Corn Litig., 2017 U.S. Dist. LEXIS 92606, at *294-95 (D. Kan.
June 13, 2017) (finding presence of third-party consultants did not destroy privilege based on the
record presented); Coffeyville Res. Refining & Mktg. v. Liberty Surplus Ins. Corp., No. 08-1204WEB, 2009 WL 790180, at *3 (D. Kan. Mar. 24, 2009) (rejecting conclusory assertions that a
consultant engineering firm was an authorized representative of the client); W. Res., Inc. v. Union
Pacific R.R. Co., No. 00-2043-CM, 2002 WL 181494, at *7 (D. Kan. Jan. 31, 2002) (finding a
consultant’s preparation or review of documents was not tantamount to disclosing privileged
materials to an outside third party).
Likewise, Pipeline’s reliance on the fact that Ms. Land’s Independent Contractor
Agreement specifies that she cannot act for or bind Madison is not persuasive. The third party in
Bieter also had an independent contractor agreement that expressly stated he was not an agent,
employee, or partner. 16 F.3d at 933-34. Nevertheless, he was retained to provide advice and
guidance regarding commercial and retail development, including working to develop the parcel
of land that was the subject of the litigation and the resulting litigation. Id. So, too, Madison
retained Ms. Land to provide services regarding certain business transactions and due diligence,
including the parties’ business dealings that resulted in this litigation.

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B.

Documents Involving Ms. Rondan

Fourteen entries on Madison’s privilege log involve Ms. Rondan, a public relations
executive with an outside firm—specifically, those appearing on Privilege Log Entry Nos. 126,
129, 130, 132, 139-148. For these documents, Pipeline argues that (1) Madison waived the
privilege by including Ms. Rondan, and (2) these communications involve business advice, not
legal advice. Turning to the second argument first, the court finds Madison has not met its burden
to prove that these communications involve legal advice. Accordingly, they must be produced.
The attorney-client privilege does not apply to all communications between an attorney
and client. Cypress Media, Inc. v. City of Overland Park, 997 P.2d 681, 690 (Kan. 2000). For the
privilege to apply, the communication must be made for the purpose of giving or receiving legal
advice. Id. at 689-90. Legal advice must predominate for the communication to be protected. See
New Jersey v. Sprint Corp., 258 F.R.D. 421, 444 (D. Kan. 2009) (applying federal common law).
In support of Madison’s privilege claim, it points to Ms. Land’s affidavit, which explains
that the purpose of the communications with Ms. Rondan was so that Ms. Rondan could help guide
the company and its attorneys “concerning public relations issues” that might result from a classaction complaint filed on behalf of Thunder ticket buyers. Ms. Land states that several entries
involve communications “as we sought to set up a call with counsel and Ms. Rondan so that Ms.
Rondan could help guide the company and its counsel concerning public relations issues that might
arise from the lawsuit.” (ECF No. 441-2 ¶ 12.) These descriptions suggest only that the
predominant purpose of the communications was to obtain public relations advice from Ms.
Rondan and, even further afield, as they sought to set up a call about that advice. Although
Madison argues counsel was included on all communications and that the communications would
not have occurred “but for the fact that a lawsuit was filed,” these considerations are insufficient

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to show that Ms. Rondan provided any information to Madison’s attorneys to enable them to render
legal advice or to provide legal services.

Furthermore, these descriptions fall short of

demonstrating that legal advice predominated in these communications between Ms. Rondan and
Madison’s attorneys.
Madison relies on In re Syngenta AG MIR 162 Corn Litig., 131 F. Supp. 3d 1177, 1225 (D.
Kan. 2015), to argue that plaintiffs might include statements in pleadings for public relations
purposes rather than for the purpose of stating a cognizable claim. But the court in Syngenta made
this observation in the context of deciding a motion to dismiss, not resolving a privilege dispute.
The fact that a lawyer might include statements in a pleading for public relations purposes is
insufficient to establish that Ms. Rondan was involved in communications helping to formulate a
response to a class action for predominantly legal purposes.
C.

Documents With the “KAABOO Del Mar” Subject Line

Pipeline argues Madison has provided insufficient information to evaluate Madison’s
privilege claim as to four emails containing the subject line “KAABOO Del Mar.” Pipeline argues
Madison’s description of these document is too vague to show that the emails were created for a
predominantly legal purpose versus a predominantly business purpose. Pipeline also questions
Madison’s assertion that the documents are related to this litigation because Madison previously
argued that KAABOO is unrelated to the named defendants in this action for discovery purposes.
Madison argues Ms. Land’s affidavit establishes that these documents are requests for legal advice
from counsel and that counsel provided legal advice in response. Madison also argues that whether
it fought to keep Pipeline from expanding this litigation to include KAABOO has no bearing on
whether these documents are privileged.

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The court has conducted an in camera inspection of the emails listed in Privilege Log Entry
Nos. 127 and 134-136. These are all communications between Mr. Gordon, Ms. Land, and Stacey
S. Chapman, Madison’s in-house counsel. Several individuals with Madison are copied on the
emails between Mr. Gordon and Ms. Chapman. The emails involve a request for legal advice from
Mr. Gordon, a response from counsel, a request from counsel to Ms. Land for additional
information so that counsel could provide additional legal advice to Mr. Gordon, and a response
from Ms. Land with the requested information. The court agrees with Madison that these emails
are attorney-client privileged communications. The court also agrees with Madison that its prior
positions concerning discovery relating to KAABOO do not go to any of the elements of the
attorney-client privilege.
IV.

CONCLUSION
For the reasons stated above, the court finds that Madison has not established its claim of

attorney-client privilege as to emails sent to or received by Ms. Rondan, Privilege Log Entry Nos.
126, 129, 130, 132, 139-148. The court therefore grants Pipeline’s motion to compel as to these
documents. The court also grants the motion insofar as it has conducted an in camera inspection
of Privilege Log Entry Nos. 127 and 134-136. The motion is denied in all other respects.
IT IS THEREFORE ORDERED that Plaintiffs’ Renewed Motion to Compel Suzanne
Land Documents (ECF No. 441) is granted in part and denied in part.
IT IS FURTHER ORDERED that Madison shall produce unredacted copies of the
documents sent to or received by Marcee Rondan (Privilege Log Entry Nos. 126, 129, 130, 132,
139-148) on or before May 3, 2019.

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IT IS SO ORDERED.
Dated April 29, 2019, at Topeka, Kansas.
s/ Angel D. Mitchell
Angel D. Mitchell
U.S. Magistrate Judge

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