Mack Energy Co v. Red Stick Energy, LLC et al
Filing
283
ORDER AND REASONS granting in part and denying in part 219 & 220 Motions to Compel. Signed by Magistrate Judge Janis van Meerveld on 9/26/2019. (crt,JonesSld, P)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MACK ENERGY CO.
* CIVIL ACTION NO. 16-1696
*
* SECTION: “E”(1)
VERSUS
*
* JUDGE SUSIE MORGAN
*
* MAGISTRATE JUDGE
RED STICK ENERGY, L.L.C., ET AL.
* JANIS VAN MEERVELD
*********************************** *
ORDER AND REASONS
Before the Court are the Motion to Compel Discovery Responses from Mack Energy
Company (“Mack”) (Rec. Doc. 220) and the Motion to Compel Discovery Responses from Red
Stick Energy, L.L.C. (“Red Stick”) (Rec. Doc. 219), both filed by Main Pass 21, L.L.C. (“Main
Pass 21”), Albert W. Gunther, Jr. (“Gunther Jr.”), Natrona Resources, L.L.C. (“Natrona”), Dixie
Management Services, L.L.C. (“Dixie”), The RE Trust (“RE Trust”), Old South Mechanical,
L.L.C. (“OSM”), Old South Ventures, L.L.C. (“OSV”), and Albert W. Gunther, III (“Gunther III”
and with Main Pass 21, Gunther Jr., Natrona, Dixie, RE Trust, OSM, and OSV (the “Gunther
Parties”). The motions have been submitted on the briefs. For the following reasons, the motions
are GRANTED in part and DENIED in part.
Background
This lawsuit arises out of a contract to acquire and develop an exploratory drilling prospect
off the coast of Plaquemines Parish (“Main Pass 21 Prospect”). Houston Energy, L.P. (“Houston
Energy”) acquired seismic data covering the Main Pass 21 Prospect, acquired a lease covering the
lands in the Main Pass 21 Prospect, and contacted various parties to participate in the prospect.
Mack says it was recruited to participate as the operator under a participation agreement (“PA”)
and a joint operating agreement (“JOA”). Under the PA, all of the parties agreed to bear their
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proportionate share of the cost to acquire the lease and the seismic data, to develop the prospect,
and to drill the initial test well. As operator, Mack was responsible to drill the initial well, including
paying the costs thereof which it would invoice to the parties in their proportionate share. Mack
claims that when it was first approached by Houston Energy, there was still a 26.5% interest
available. Mack claims it was unwilling to agree to act as operator until that remaining interest was
purchased and it was satisfied that the purchaser would have sufficient funds to pay their share of
the costs. Mack says that Houston Energy represented that Thomas Burnett and Gunther Jr. where
interested buyers, had previously participated with Houston Energy in a prospect named Barber’s
Hill, and that they had timely paid their share of their costs for the Barber’s Hill Prospect.
Mack says that Houston Energy informed it that Burnett and Gunther Jr. had agreed to buy
the 26.5% interest through an entity to be formed in the future and that the entity would be funded
90% by Gunther Jr. and 10% by Burnett through his company Red Stick.1 Due to time constraints
and deadlines, Mack says it agreed to allow Red Stick to execute the PA and JOA as buyer of the
full 26.5% interest with the understanding that pursuant to an agreement between Red Stick and
Gunther Jr., the 26.5% interest would be assigned to Main Pass 21, LLC (“Main Pass”), the new
entity that had not yet been formed. Mack says that attached to the executed PA is an Authority
for Expenditures (“AFE”) estimating the cost of a completed initial test well to be $4,924,795.
According to Mack, by executing the PA, Red Stick agreed to pay $109,285.25 to Houston Energy,
an initial payment of $830,602.75 to Mack, and 26.5% of any additional costs incurred to drill and
test the initial well and either completing it for production or plugging and abandoning it if it was
a dry hole.
1
Mack also cites a December 3, 2015, email chain between Burnett and some of Gunther Jr.’s agents to support its
assertion that Gunther Jr. and Burnett agreed to acquire the 26.5% interest in the Main Pass 21 Prospect through a new
limited liability company.
2
Mack proceeded to drill a test well, which was plugged and abandoned as a dry hole. Mack
says the actual cost was less than estimated. It says it invoiced Red Stick for its share of the costs
because the assignment from Red Stick to Main Pass had not yet been completed. Mack says a
portion of Red Stick’s shares of the costs have been paid late and a portion have not been paid at
all. Mack sent a written demand to Red Stick on June 20, 2016. Red Stick paid $31,699.93, which
corresponds with 10% of Red Stick’s share of costs. Mack says that it was informed by Burnett
that pursuant to the agreement between him and Gunther Jr., Red Stick is only responsible for
10% because Red Stick would assign its interest to Main Pass and Gunther Jr. is responsible for
funding 90% of Main Pass.
Mack says that it believes Main Pass was formed on December 16, 2015, before the PA
and JOA were executed. Mack says that Main Pass paid it $830,602.75, on December 23, 2015,
and that Main Pass paid Houston Energy $109,285.52 on January 4, 2016, all pursuant to the PA.
Mack asserts on information and belief that the two payments were made from Gunther Jr.’s
personal funds “using Main Pass as a shell to shield Gunther, Jr., from liability under the PA and
JOA.”
Mack filed this lawsuit in the Western District of Louisiana on December 8, 2016 against
Red Stick, Burnett, and Main Pass, seeking to compel arbitration of the payment dispute. After
four prior amendments (resulting in the joinder of Dixie, Natrona, OSM, OSV, Gunther III, and
RE Trust, each alleged to be a member of Main Pass or a member of their members), Mack’s Fifth
Superseding and Amended Complaint, filed on June 18, 2019, now names only Red Stick, Main
Pass, and Gunther Jr. as defendants. Mack asserts a claim for breach of the PA and JOA against
Red Stick, it asserts a claim for detrimental reliance against Gunther Jr. and it claims that “Main
Pass assumed the obligations of Red Stick under the PA and JOA.”
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Red Stick has asserted a Third-Party Complaint against the Gunther Parties, alleging that
they have breached their agreement to accept assignment of 90% of the ownership interest in Main
Pass and to be responsible for 90% of the drilling costs related to the project. Alternatively, they
assert a claim for detrimental reliance. Red Stick also asserts that Gunther Jr. and the Gunther
Entities improperly used the Gunther Entities and Main Pass to perpetrate a fraud on Red Stick
and that the Gunther Entities are so unified with each other that their misuse of the corporate form
requires that the corporate form should be disregarded. Red Stick alleges that the Gunther Entities
have common ownership and management and that they comingle property and assets.
On June 4, 2019, Gunther Jr. named Houston Energy as a third-party defendant, alleging
that Houston Energy was not authorized to make any representations on behalf of Gunther Jr.
personally. Houston Energy filed its Answer on July 8, 2019.
Meanwhile, on October 16, 2018, Mack entered into a settlement agreement with Red
Stick, Burnett and Janet Burnett pursuant to which Red Stick and the Burnetts have (1) assigned
to Mack their rights against the Gunther Parties, (2) paid Mack $25,000, and (3) agreed not to
contest a future motion for summary judgment filed by Mack against Red Stick, and Mack has
agreed (1) to release all claims against the Burnetts, (2) not to execute any judgment against Red
Stick and the Burnetts, and (3) to pay the attorneys’ fees of Red Stick and Burnett in this litigation.
The Gunther Parties filed a motion for summary judgment arguing that the settlement
agreement created a right of litigious redemption2 under Louisiana law such that the Gunther
Parties could extinguish their debt to Red Stick by paying to Mack the attorneys’ fees and costs
incurred by Mack for its representation of Red Stick and Burnett from the date of the assignment
2
Louisiana Civil Code article 2652 provides that “[w]hen a litigious right is assigned, the debtor may extinguish his
obligation by paying to the assignee the price the assignee paid for the assignment, with interest from the time of
assignment.”
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(October 16, 2018) to the date of demand for litigious redemption (November 12, 2018). The
district court agreed that Red Stick and Burnett had assigned “litigious rights” and found that the
Gunther Parties were prompt in making known their intent to exercise the right of litigious
redemption. (Rec. Doc. 137). However, the court denied the motion for summary judgment,
rejecting the Gunther Parties’ argument that the price Mack paid for the litigious rights was
attorneys’ fees and costs. Instead, the court found that the price the Gunther Parties owe to redeem
the litigious rights is the amount of the debt of Red Stick and the Burnetts that was discharged by
the assignment. Id.
After this ruling, on May 1, 2019, the district court ruled on Mack’s pending motion for
partial summary judgment pursuant to which Mack sought a ruling that Red Stick was liable to it
in the amount of $285,277.62 in principal, $47,622.85 in interest, $50,766.25 in attorneys’ fees,
and $763.17 in costs. The Gunther Parties opposed Mack’s motion on the grounds that Red Stick’s
debt to Mack had been extinguished through remission when Mack, Red Stick, and the Burnetts
entered into the settlement agreement. The district court denied the motion for partial summary
judgment, finding that the settlement agreement was ambiguous as to whether Mack intended to
remit the debt owed to it by Red Stick. (Rec. Doc. 162). Among other things, the Gunther Parties
argued that when Mack referred to the debt as “extinguished” in its response to their motion for
litigious redemption, Mack had judicially admitted the remission of the debt. The district court
rejected this interpretation, and concluded that it would not treat the statement in Mack’s brief as
a judicial admission of the extinguishment of the debt. Id.
A little over a month later, on June 11, 2019, Mack and Red Stick executed an addendum
to their litigation agreement and submitted it to the court. The addendum provides that “it is the
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Parties’ intent that the debt owed to Mack Energy Co. has not been and shall not be remitted . . .
.” (Rec. Doc. 252-3, at 2).
Discovery
The present discovery dispute concerns two issues. The first is whether Red Stick will be
required to supplement its responses to the Gunther Parties’ discovery requests concerning Red
Stick’s evidence in support of its alter ego and corporate veil piercing claims. Red Stick objected
that the requests sought documents in the Gunther Parties’ possession and added that responsive
documents had been produced. The Gunther Parties complain that Red Stick has failed to identify
any documents to support its claims. They demand that Red Stick confirm or deny the existence
of any evidence to support piercing the corporate the veil. They say that responsive documents
must be identified by bates stamp. Following the filing of the motion to compel, Red Stick
amended its response to the Gunther Parties’ discovery requests: 1) to object that the request is
unduly burdensome because the documents are in the Gunther Parties’ possession, 2) to respond
that the only documents in its possession to support its claims have already been produced along
with a reference to “emails between representatives of Red Stick and representatives of
Defendants”, and 3) to note that additional documents are in Gunther’s possession and subject to
outstanding discovery. Red Stick reports that the “emails” it refers to amount to only 20 pages. In
reply, the Gunther Parties argue that Red Stick’s revised responses remain insufficient. They say
Red Stick has failed to produce any documents showing evidence of comingled funds, misuse of
the corporate form, failure to observe corporate formalities, failure to properly approve
management decisions, improper handling of company funds, inadequate capitalization, or use of
the entities for personal purposes. The emails do not contain any information regarding these
issues. The Gunther Parties say that Red Stick has no evidence to support its claims and is on a
6
fishing expedition. Instead, they argue, Red Stick should be required to admit that it possesses no
responsive documents.
Of note, the “outstanding discovery” referred to by Red Stick in its supplemental response
was addressed by the undersigned in resolving a motion to compel filed by Mack in June 2019.
On July 26, 2019, the undersigned ruled that Mack would be allowed to conduct discovery into
the alter ego and corporate veil piercing claims asserted by Red Stick against the Gunther Parties,
finding that the allegations and evidence available at this time were sufficient to justify proceeding
with such discovery. (Rec. Doc. 225). The Gunther Parties appealed that decision to the district
court, arguing that it should not be required to provide information or documents regarding their
bank statements, tax returns, formation documents, loans or transfers among them (except for Main
Pass), or consideration paid for an ownership interest in each of the Gunther Parties. Following
the filing of the reply, the district court ruled on the Gunther Parties’ appeal of the undersigned’s
discovery ruling during a status conference on August 28, 2019. (Rec. Doc. 262). The district court
affirmed in part and reversed in part. The court ordered production of Gunther Jr.’s federal tax
Form 1040 with Schedule C for 2015 through 2018 and ordered in camera review of Gunther Jr.’s
personal bank statements. Gunther Jr. was also required to provide the court with a list of bank
account numbers for himself and the other entities named in the action. Production was due
September 18, 2019.
The second discovery issue before the court at this time is whether Mack and Red Stick
will be required to produce correspondence regarding the negotiation of their settlement agreement
and drafts of the settlement agreement. The Gunther Parties argue that this information is relevant
to determine Mack and Red Stick’s intent. They point out that the district court has already held
the settlement agreement ambiguous as to whether the parties intended to extinguish Red Stick’s
7
debt to Mack. Mack and Red Stick both respond that any ambiguity in the settlement agreement
has been rectified by the June 2019 Addendum, which they say clarifies that they did not intend to
extinguish the debt. Additionally, they both assert that the communications are protected by the
common interest privilege. In reply, the Gunther Parties argue that if Mack and Red Stick
extinguished the debt when they entered the settlement agreement, the debt cannot be revived by
virtue of the addendum. Thus, they insist that determination of their intent at the time of the
settlement agreement remains important and the correspondence and drafts are relevant to that
issue. As to the assertion of the common interest privilege, the Gunther Parties insist that they do
not seek correspondence between counsel and their clients. They also argue that at the time Mack
and Red Stick were negotiating the settlement agreement, they were not aligned and so they cannot
rely on the common interest privilege.
Law and Analysis
1. Scope of Discovery
The Federal Rules of Civil Procedure provide that “parties may obtain discovery regarding
any nonprivileged matter that is relevant to any party's claim or defense and proportional to the
needs of the case.” Fed. R. Civ. Proc. 26(b)(1). Of note, with the 2015 amendment to Rule 26, it
is now clear that “[i]nformation within this scope of discovery need not be admissible in evidence
to be discoverable.” Id. In assessing proportionality of discovery, the following should be
considered: “the importance of the issues at stake in the action, the amount in controversy, the
parties' relative access to relevant information, the parties’ resources, the importance of the
discovery in resolving the issues, and whether the burden or expense of the proposed discovery
outweighs its likely benefit.” Id. The advisory committee comments to the 2015 amendment to
Rule 26 make clear that the parties and the court have a collective responsibility to ensure that
8
discovery is proportional. The party claiming it would suffer an undue burden or expense is
typically in the best position to explain why, while the party claiming the information sought is
important to resolve the issues in the case should be able “to explain the ways in which the
underlying information bears on the issues as that party understands them.” Id. advisory
committee’s note to 2015 amendment. “The court’s responsibility, using all the information
provided by the parties, is to consider these and all the other factors in reaching a case-specific
determination of the appropriate scope of discovery.” Id.
2. Common Interest Privilege
Where state law provides the rule of decision, state law governs privilege. Fed. R. Evid.
501; In re Avantel, S.A., 343 F.3d 311, 323 (5th Cir. 2003). The parties here appear to agree that
either Louisiana or Texas law applies to the issues raised in this case. Louisiana’s Rules of
Evidence establish a privilege against disclosure of:
a confidential communication, whether oral, written, or otherwise, made for the
purpose of facilitating the rendition of professional legal services to the client, as
well as the perceptions, observations, and the like, of the mental, emotional, or
physical condition of the client in connection with such a communication, when the
communication is . . . [b]y the client or his lawyer, or a representative of either, to
a lawyer, or representative of a lawyer, who represents another party concerning a
matter of common interest.
La. Code Evid. art. 506(B)(3). Similarly, the Texas Rules of Evidence protect from disclosure:
confidential communications made to facilitate the rendition of professional legal
services to the client . . . by the client, the client's representative, the client's lawyer,
or the lawyer's representative to a lawyer representing another party in a pending
action or that lawyer's representative, if the communications concern a matter of
common interest in the pending action;
Tex. R. Evid. 503(b)(1)(C). Under Texas law, a pending legal action is required. Id. Under both
state’s laws, the communication must have been made for the rendition of professional legal
services. Neither state protects communications made between clients. See Vintage Assets, Inc. v.
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Tennessee Gas Pipeline Co., L.L.C., No. CV 16-0713, 2017 WL 2812967, at *3 (E.D. La. June
29, 2017) (refusing to extend the attorney-client privilege to communications made between
representative of one client and a representative of another client (not the other client’s lawyer),
even where the latter’s counsel was copied on the communication.”); In re XL Specialty Ins. Co.,
373 S.W.3d 46, 52 (Tex. 2012) (“The allied litigant doctrine protects communications made
between a client, or the client's lawyer, to another party's lawyer, not to the other party itself.”).
“A party asserting a privilege exemption from discovery bears the burden of demonstrating
its applicability.” In re Santa Fe Int'l Corp., 272 F.3d 705, 710 (5th Cir. 2001). When documents
are withheld as privileged or protected as trial-preparation materials, Federal Rule of Civil
Procedure 26(b)(4)(A) requires that the party invoking the privilege “(i) expressly make the claim;
and (ii) describe the nature of the documents, communications, or tangible things not produced or
disclosed--and do so in a manner that, without revealing information itself privileged or protected,
will enable other parties to assess the claim.” Thus, Courts typically require a privilege log that
identifies “each document and provide basic information, including the author, recipient, date and
general nature of the document.” Benson v. Rosenthal, No. CV 15-782, 2016 WL 1046126, at *9
(E.D. La. Mar. 16, 2016) (quoting In re Papst Licensing, GmbH Patent Litig., No. Civ. A. MDL
1298, 2001 WL 1135268, at *2 (E.D. La. Sept. 19, 2001).
3. Request for Alter Ego and Veil Piercing Documents
The court finds that Red Stick’s responses to the discovery requests concerning its alter
ego and corporate veil piercing claims are sufficient at this time. Red Stick has identified 20 pages
of documents. Although bates numbers were not provided, this is not the kind of volume of
documents that requires bates number identification for the recipient to know what documents are
being referenced. Red Stick’s response makes clear that it has no other responsive documents in
10
its possession. The Gunther Parties are in the process of responding to or have now responded to
the un-objected to portions of the undersigned’s discovery order and the district court’s recent
ruling regarding production of tax documents and bank statements. Following the completion of
the Gunther Parties’ production and the District Court’s ruling following in camera review of the
Gunther Jr. bank statements, Red Stick will be required to supplement its responses within 21 days
to indicate whether it has obtained additional documents in support of its claims or whether it still
relies only on the 20 pages of emails previously produced. If additional documents have been
obtained, Red Stick shall identify the documents by bates number.
4. Requests for Documents Concerning Negotiation of the Settlement Agreement
The specific discovery sought by the Gunther Parties is an identification of all agreements
between Mack, Red Stick, and the Burnetts, after the lawsuit was initiated and a production of
same (Interrogatory No. 14 and Request for Production 11); production of correspondence
regarding the original settlement agreement (Request for Production 7); and production of
correspondence regarding any settlement agreements entered into after the October 2018
Settlement Agreement, including the addendum (Request for Production No. 8). The latter two
categories are not explicitly limited by time period, but presumably their subject matter limitation
would result in a narrow time period.
The first issue to tackle with regard to the Gunther Parties’ request for correspondence
related to the Settlement Agreement and addendum and drafts of the Settlement Agreement is the
relevance of this information. It is clear that the district judge identified “a factual dispute regarding
whether Mack intended to remit the debt by entering into the [Settlement] Agreement with Red
Stick and Thomas Burnett . . . .” (Rec. doc. 162, at 8). The district court concluded that the terms
of the settlement agreement were ambiguous on this point because of conflicting provisions. As a
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result of this finding, parol evidence of the parties’ intent may be admissible under Louisiana and
Texas law. See Mustang Tractor & Equip. Co. v. Liberty Mut. Ins. Co., 76 F.3d 89, 91 (5th Cir.
1996); Diefenthal v. Longue Vue Mgmt. Corp., 561 So. 2d 44, 51 (La. 1990). Although Red Stick
and Mack say their addendum resolves any ambiguities, they have not presented any case law to
support their interpretation that a contract entered into after a court ruling highlighting an
ambiguity can be conclusive evidence of the parties’ intent at the time of the original agreement.
Here, the Gunther Parties argue that if the debt was extinguished at the time of the original
settlement agreement, then the addendum cannot revive the debt. They insist that Mack and Red
Stick cannot use a subsequent agreement to alter the parties’ intent at the time they entered into
the settlement agreement. The court agrees that the intent of Mack, Red Stick, and the Burnetts at
the time they entered into the settlement agreement remains relevant to the determination of
whether that agreement remitted Red Stick’s debt. Thus, drafts of the October 2018 Settlement
Agreement and communications regarding the parties’ intent to remit the debt at the time they
were negotiating the agreement are relevant to the claims and defenses in this action. However,
the discovery requests as written are overbroad and exceed the scope of permissible discovery.
Interrogatory 14 and related Request for Production 11 seek identification and production
of all draft agreements, amended agreements, verbal agreements, or cancelled agreements between
Mack and Red Stick after the lawsuit was initiated on December 6, 2016. The only agreement at
issue is the October 2018 Settlement Agreement, and the only ambiguity at issue is whether the
parties intended to remit the debt owed by Red Stick to Mack. Other than drafts of the October
2018 Settlement Agreement and the June 2019 Addendum, it is not clear what other agreements
or drafts or cancelled agreements the Gunther Parties believe may exist and, if they do, how they
might be relevant to the intent of Red Stick and Mack when they entered the October 2018
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Settlement Agreement. Thus, Interrogatory 14 and Request for Production 11 will be limited to
drafts of the October 2018 Settlement Agreement, and agreements and draft agreements proposing
to amend, supplement, or clarify the October 2018 Settlement Agreement, including the June 2019
Addendum. The court notes that although the Addendum has not been held ambiguous, drafts of
the Addendum or any other supplements or amendments to the October 2018 Settlement
Agreement may shed light on the parties’ intent with regard to the October 2018 Settlement
Agreement.
The Gunther Parties also seek communications between Mack, Red Stick, and the Burnetts
concerning the October 2018 Settlement Agreement (Request 7). Because only the parties’ intent
to remit the debt is an open fact issue, only communications concerning the October 2018
Settlement Agreement that specifically concern Red Stick’s debt are relevant. Thus, this request
shall be limited to communications concerning Red Stick’s debt. The Gunther Parties further seek
communications between Mack, Red Stick, and the Burnetts concerning “any proposed settlement
agreements entered into after October 16, 2018,” including the Addendum (Request 8). This
request shall be limited to communications regarding any amendments or addenda to the October
16, 2018 Settlement Agreement, including the June 2019 Addendum, to the extent such
communications concern Red Stick’s debt.
As to the communications,3 the second issue to tackle is whether they are protected by the
common interest privilege as Red Stick and Mack insist. Importantly, there is no indication that
3
Mack and Red Stick do not appear to take the position that the draft agreements are protected by the common-interest
privilege. Indeed, draft agreements standing alone are not communications capable of being protected by the attorneyclient privilege. However, it is possible that draft agreements amount to confidential attorney-client communications.
See Total E & P USA Inc. v. Kerr-McGee Oil & Gas Corp., No. CIV.A. 09-6644, 2014 WL 3385130, at *4 (E.D. La.
July 10, 2014) (holding that redacted draft affidavits were protected by the attorney client privilege); United States v.
N.Y. Metro. Transp. Auth., No. 03CV02139-SLT-MDG, 2006 WL 3833120, at *2 (E.D.N.Y. Dec. 29, 2006) (holding
that draft uniform policy bulletins “need not be produced since they are draft documents that were submitted to
attorneys for the purpose of obtaining legal advice”).
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Mack and Red Stick have produced a privilege log identifying each allegedly privileged
communication. The fact that the parties share a common interest in pending litigation does not
cloak all of their communications with a privilege. Under the plain language of both the Texas and
Louisiana rules of evidence, only communications between a client or its lawyer (or their
representatives) to the other party’s lawyer are covered. La. Code Evid. art. 506(B)(3); Tex. R.
Evid. 503(b)(1)(C). Additionally, the communications are only protected if they were made for the
purpose of facilitating the rendition of professional legal services. La. Code Evid. art. 506(B)(3);
Tex. R. Evid. 503(b)(1)(C). Texas law specifically requires that a protected communication must
concern a matter of common interest in a pending action. Tex. R. Evid. 503(b)(1)(C). While some
of the communications concerning the negotiation of the settlement agreement would likely meet
these requirements, it is unclear that every single communication would. Moreover, while Red
Stick and Mack aligned themselves against the Gunther Parties with the settlement agreement, as
the Gunther Parties point out, Red Stick and Mack were also adverse to each other at the time they
engaged in the negotiation. A careful review of each communication to determine whether it was
made to the other party’s attorney for the purpose of facilitating legal advice and concerning a
matter of common interest must be performed. Communications in which the parties are
negotiating issues on which they are adverse would be unlikely to be protected by the commoninterest privilege. Communications that are not in furtherance of legal advice or which are between
the clients and not the attorneys are not privileged.
Accordingly, Mack and Red Stick shall respond to the Gunther Parties’ discovery requests
as limited by the court above. As to each responsive document over which they allege a common
interest privilege, they shall list the document on a privilege log. The privilege log should be
sufficiently detailed so that the Gunther Parties can contest the claim of privilege if appropriate.
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If, under the circumstances, a privilege log would be overly burdensome, Mack can request relief
from the Court.
Conclusion
For the foregoing reasons, the Gunther Parties’ Motions to Compel are GRANTED in part
and DENIED in part. Within 21 days of receiving both the District Court’s ruling following its in
camera review of the Gunther, Jr., bank statements and the Gunther Parties’ completion of their
responses to the other pending discovery, Red Stick shall revise its discovery responses to refer to
any additional responsive documents by bates number or to make clear that it has no other
responsive documents in its possession besides the emails it has already referred to.
Regarding communications and draft agreements surrounding Mack and Red Stick’s
settlement, production shall be limited to (a) drafts of the October 2018 Settlement Agreement; (b)
Communications regarding the October 2018 Settlement Agreement that concern Red Stick’s debt
to Mack, and (c) agreements and draft agreement proposing to amend, supplement, or clarify the
October 2018 Settlement Agreement, including the June 2019 Addendum. As to any
communications responsive to (a)-(c) above and over which a common interest or other privilege
is asserted, Mack and Red Stick must prepare a privilege log, sufficiently detailed so that the
Gunther Parties can contest the claims of privilege if appropriate. The production and privilege log
are to occur within 30 days of this order. Should such a privilege log prove overly burdensome
under the circumstances, Mack may request relief from the Court.
New Orleans, Louisiana, this 26th day of September, 2019.
Janis van Meerveld
United States Magistrate Judge
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