Shipes et al v. Amurcon Corporation

Filing 118

ORDER Granting in Part and Denying in Part 76 Motion to Quash - Signed by Magistrate Judge Mona K. Majzoub. (LBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Allison Shipes, et al.,
Plaintiffs,
vs.
Amurcon Corp.,

Civil Action No. 10-14943
District Judge Victoria A. Roberts
Magistrate Judge Mona K. Majzoub

Defendant.
_____________________________/
ORDER
Before the Court is Defendant’s emergency motion to quash subpoena issued to non-party
Gene Farkas. (Dkt. 76.) The Court has been referred this motion for determination pursuant to 28
U.S.C. § 636(b)(1)(A). (Dkt. 80.) The Court has reviewed the pleadings, dispenses with a hearing,
and issues this order.1
I.

Background
On August 19, 2011 Plaintiffs issued a subpoena to Gene Farkas, Defendant’s former Vice-

President of Human Resources. (Pls.’ Mot. at 1.) Plaintiffs were requesting Mr. Farkas to produce
two audio recording tapes that they believed were relevant to the case. (Id.) On September 1, 2011
Defendant filed an emergency motion to quash Plaintiffs’ subpoena, claiming the attorney-client
privilege prohibited disclosure of the audio recordings in Mr. Farkas’s possession. (Id.) On that

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The Court dispenses with a hearing pursuant to Eastern District of Michigan Local Rule
7.1(f)(2).
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same day, Judge Cleland quashed the subpoena.2 (Id.) In Judge Cleland’s order, he stated that he
“will grant the motion subject to further possible motion practice before Judge Roberts and quash
the subpoena of Mr. Gene Farkas at this time.” (Dkt. 40, Cleland’s Order at 1.) Judge Cleland
concluded, “[i]f [] Plaintiffs wish to re-file or otherwise pursue the objects of this subpoena, counsel
should contact Judge Roberts’s case manager . . . for further direction.” (Id. at 4.) Nothing
happened regarding the audio recording issue until Plaintiffs filed a motion to compel on February
23, 2012. (Dkt. 55, Pls.’ Mot.) The Court addressed the motion to compel on April 9, 2012, and
denied the motion, finding Plaintiffs’ request procedurally improper. (Dkt. 71.)
On April 10, 2012 Plaintiffs issued another subpoena for two specific audiotapes: (1) the
Reggie Ball audiotape and (2) the Bob Jacobs audiotape. Nine days later, Defendant filed the
present motion to quash. (Dkt. 76.)
After reviewing the pleadings, the Court ordered Mr. Farkas to produce the tapes to the Court
so that it could determine whether the attorney-client privilege protected any portions of the
conversations from disclosure and whether the conversations were relevant to this lawsuit.
On August 23, 2012 the Court held a phone conference with the parties and the audiotapes
were produced to the Court.
II.

Analysis
A.

The Court quashes the subpoena with respect to the Bob Jacobs conversation
1.

The attorney-client privilege protects the Bob Jacobs conversation

Defendant argues that the conversation that Mr. Farkas had with Defendant’s attorney, Bob

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Plaintiffs state that Judge Roberts, the district judge presiding over this case, was
unavailable for ruling.
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Jacobs, is protected from disclosure by the attorney-client privilege. (Def.’s Mot. to Quash at 5-6.)
While the Court does not agree with Defendant that “any” conversation between Mr. Farkas and Mr.
Jacobs should be protected, the Court does agree that the attorney-client privilege does protect the
conversation at issue.
The attorney-client privilege:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in
his capacity as such, (3) the communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance permanently protected (7) from
disclosure by himself or by the legal adviser, (8) unless the protection is waived.

360 Constr. Co., Inc. V. Atsalis Bros. Painting Co., 280 F.R.D. 347, 351 (E.D.Mich. 2012) (Lawson,
J.) (citation omitted). “Because the privilege operates to reduce the amount of information
discoverable during the course of a lawsuit, it is narrowly construed.” Id. (citation omitted).
The Court has reviewed the conversations and finds that the Mr. Farkas-Mr. Jacobs
conversation is protected by the attorney-client privilege. In the conversation, Mr. Farkas discusses
discovery request compliance with Mr. Jacobs. Mr. Farkas also asks for advice on what he should
do regarding the discovery requests, and offers to help Mr. Jacobs in any way regarding the
discovery requests. The conversation is therefore protected by the attorney-client privilege.
Plaintiffs argue that Mr. Jacobs was Amurcon’s attorney and that Mr. Farkas was not longer
working for Amurcon at the time of the conversation. (Pls.’ Resp. at 7.) The Court rejects
Plaintiffs’ argument. Mr. Farkas was working for a subsidiary of Amurcon at the time of the
conversation. Case law supports the finding that Mr. Farkas’s conversation with his parent
company’s attorney is protected by the attorney-client privilege. See In re Dow Corning Corp., 9520512, 2010 WL 3927728, at *10 (E.D.Mich. June 15, 2010) (Hood, J.) (citations omitted) (citing

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cases for the proposition that “[t]he cases clearly hold that a corporate ‘client’ includes not only the
corporation by whom the attorney is employed or retained, but also parent, subsidiary and affiliate
corporations.”). (See also Pls.’ Resp. at 8, noting that Mr. Farkas was working for SSG, a subsidiary
of Amurcon.)
2.

The crime-fraud exception does not apply to the conversation

Plaintiffs argue that the crime-fraud exception applies to the Mr. Jacobs conversation if the
attorney-client privilege protects the conversation. (Pls.’ Resp. at 9.)
“A communication is excepted from the attorney-client privilege if it is undertaken for the
purpose of committing or continuing a crime or fraud.” U.S. v. Collis, 128 F.2d 313, 321 (6th Cir.
1997). “The crime-fraud exception applies where the plaintiffs ‘show that there is a reasonable basis
to (1) suspect the perpetration or attempted perpetration of a crime or fraud and (2) that the
communications were in furtherance thereof.’” State Farm Mut. Auto. Ins. Co. v. Hawkins, 0810367, 2011 WL 595694, at *3 (E.D.Mich. Feb. 10, 2011) (Cleland, J.) (citations omitted). Because
Plaintiffs seek to “use the crime-fraud exception for discovery materials that are purportedly
protected by the attorney-client privilege, [they] bear[] the burden of making a prima facie showing
of a crime or fraud.” Id. at *7 (citations omitted). To make the prima facie showing needed,
Plaintiffs must show that there is “more than a strong suspicion that a crime was committed[.]” Id.
At * 7, n 5 (citations omitted).
The Court finds that the crime-fraud exception does not apply to the Mr. Farkas-Mr. Jacobs
conversation. Here, the Court has reviewed the conversation and finds that Plaintiffs’ argument fails
because they cannot show that the conversation was made in furtherance of any alleged perpetration
of a crime. There is no indication that this conversation, or the statements made during it, were to

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further a crime or fraud, explicitly or implicitly.
The crime-fraud exception does not apply. The Court therefore grants the motion to quash
with respect to this audiotape.
B.

The Court will not quash the subpoena with regards to the Reggie Ball
conversation.

The Court has reviewed the Reggie Ball tape and it will not quash the subpoena. Portions
of the conversations touch upon time cards and overtime and therefore may lead to admissible
evidence and thus are relevant.
III.

Conclusion
For the above-stated reasons, the Court grants in part and denies in part Defendant’s motion

to quash.

The Court grants the motion with respect to the Bob Jacobs conversation–the

communications are privileged and the Court denies the request to quash the subpoena with respect
to that audiotape. The Court denies the motion with respect to the Reggie Ball tape–it is relevant
and not privileged.
So ordered.
NOTICE TO THE PARTIES
Pursuant to Federal Rule of Civil Procedure 72(a), the parties have a period of fourteen days
from the date of this Order within which to file any written appeal to the District Judge as may be
permissible under 28 U.S.C. § 636(b)(1).

Dated: August 28, 2012

s/ Mona K. Majzoub
MONA K. MAJZOUB
UNITED STATES MAGISTRATE JUDGE

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PROOF OF SERVICE
I hereby certify that a copy of this Order was served upon Counsel of Record on this date.
Dated: August 28, 2012

s/ Lisa C. Bartlett
Case Manager

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