Siser North America, Inc. et al v. World Paper, Inc. et al

Filing 97

ORDER GRANTING DEFENDANTS MOTION FOR PROTECTIVE ORDER [#76] AND DENYING MICHAEL L. FEINSTEINS MOTION FOR SHORT DELAY [#81]. Signed by District Judge Gershwin A. Drain. (TBan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
SISER NORTH AMERICA, INC., et al.,
Plaintiffs,

Case No. 16-cv-14369
Hon. Gershwin A. Drain

v.

WORLD PAPER INC., et al.,
Defendants.
________________________________/

ORDER GRANTING DEFENDANTS’ MOTION FOR PROTECTIVE
ORDER [#76] AND DENYING MICHAEL L. FEINSTEIN’S MOTION FOR
SHORT DELAY [#81]
I.

INTRODUCTION
On June 1, 2018, Defendants moved for a protective order regarding the

disclosure of privileged documents Mr. Feinstein attached as exhibits in support of
his Objections to the Magistrate Judge’s Order Imposing Sanctions. [Dkt. Nos. 76,
69, 70]. On June 15, 2018, Plaintiffs responded to the Defendants’ Motion [ Dkt.
No. 80]. On June 18, 2018, Mr. Feinstein moved for an extension of time to file a
Reply to Plaintiffs’ Response concerning Mr. Feinstein’s Objections to Magistrate
Judge Stafford’s Order Awarding Sanctions [Dkt. No. 74], as well as an extension
to respond to Defendants’ Motion for Protective Order Regarding Disclosure of

Privileged Documents [Dkt. No. 76]. On June 20, 2018, Plaintiffs responded to Mr.
Feinstein’s Motion for Short Delay [Dkt. No. 82]. On June 22, 2018, Defendants
replied to Plaintiffs’ Response concerning the Motion for Protective Order [Dkt.
No. 83], which is presently before the Court.
Upon review of the parties’ submissions, the Court finds that oral argument
will not aid in the resolution of this matter. Accordingly, the Court will resolve the
Motion for Protective Order on the briefs. See E.D. Mich. L.R. 7.1(f)(2).
II.

BACKGROUND
This civil action arose in December of 2016 when Plaintiffs Siser North

America, Inc. and Siser S.R.L. (“Plaintiffs”) filed their Complaint alleging that
Defendants World Paper, Inc., Herika G., Ekaterina Kostioukina, Jerosa Designs
LLC 1, HG World Group, Inc., DOES #1-10, and Hernan Gonzalez (“Defendants”)
illegally advertised and sold inferior counterfeit heat-transfer products on websites
such as Amazon and eBay under one or more of Plaintiffs’ trademarks – namely,
“Cadflex,” “Reflectall,” “Easyweed,” and “Siser.” At that time, Plaintiffs were
represented by attorneys Barbara L. Mandell (“Ms. Mandell”) and Michael B.
Stewart (“Mr. Stewart”) of Fishman Stewart PLLC, whereas Defendants were
represented by attorneys Franklin M. Smith (“Mr. Smith”) of Dickinson Wright
1

Ekaterina Kostioukina and Jerosa Designs LLC are no longer defendants in this
action.
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PLLC (“Dickinson Wright”) and Mr. Feinstein 2. Following a scheduling
conference with this Court, a jury trial was set for November 2018.
On October 6, 2017, Plaintiffs filed a motion to compel discovery from
Defendants. See Dkt. No. 23. In February of 2018, a hearing was held by the Court
concerning the Plaintiff’s motion to compel and for Defendants to show cause why
they should not be sanctioned. See Dkt. No. 35. On May 4, 2018, Magistrate Judge
Stafford ordered Mr. Feinstein to reimburse Plaintiffs $76,925. 53. See Dkt. No.
64.
On May 7, 2018, this Court permitted Mr. Feinstein to withdraw as counsel
for Defendants. See Dkt. No. 68. On that same day, Mr. Shreve entered an
appearance as counsel on behalf of Mr. Feinstein. See Dkt. No. 65. On May 18,
2018, Mr. Feinstein objected to the Magistrate Judge’s order. See Dkt. No. 71. As
part of the exhibits to his objections, Mr. Feinstein filed documents under seal that
are covered by attorney-client privilege. See Dkt. No. 70. On July 20, 2018, the
Court affirmed Magistrate Judge Stafford’s order requiring Mr. Feinstein to
reimburse Plaintiffs $76,925. 53. See Dkt. No. 87. Through their new counsel,
Michael J. Rock (“Mr. Rock”), Defendants now move for a protective order

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Both Mr. Smith and Mr. Feinstein have since been permitted to withdraw as
counsel.
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regarding Mr. Feinstein’s disclosure of privileged documents used as exhibits to
his objections.
III.

STANDARD OF REVIEW
Protective orders are governed by Federal Rule of Civil Procedure 26(c)(1),

which states in relevant part:
(1) In General. A party or any person from whom discovery is sought may
move for a protective order in the court where the action is pending — or
as an alternative on matters relating to a deposition, in the court for the
district where the deposition will be taken. The motion must include a
certification that the movant has in good faith conferred or attempted to
confer with other affected parties in an effort to resolve the dispute
without court action. The court may, for good cause, issue an order to
protect a party or person from annoyance, embarrassment, oppression, or
undue burden or expense, including one or more of the following:
(A) forbidding the disclosure or discovery[.]
FED. R. CIV. P. 26(c)(1). In other words, “a district court may enter a protective
order limiting the use or disclosure of discovery materials upon a mere showing of
‘good cause[.]’” Shane Grp., Inc. v. Blue Cross Blue Shield, 825 F.3d 299, 305
(6th Cir. 2016).
IV.

DISCUSSION
a. MR. FEINSTEIN’S MOTION FOR SHORT DELAY [81]
To begin, Mr. Feinstein’s motion to extend his deadline to respond to

Plaintiffs concerning the Magistrate Judge’s order imposing sanctions is now moot
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since the Court has since affirmed this order. See Dkt. No. 87. Additionally, the
Court denies Mr. Feinstein’s request to extend his deadline in responding to
Defendants’ motion for a protective order. As Plaintiffs pointed out in their
response to this motion, Mr. Feinstein’s attorney, Mr. Shreve, is counsel of record
and receives documents filed electronically with the Court. Dkt. No. 82, p. 5 (Page
ID 2465). Thus, Plaintiffs had no reason to order service directly to Mr. Feinstein.
Mr. Feinstein’s baseless excuses do not persuade this Court.
b. DEFENDANTS’ ARGUMENTS FOR PROTECTIVE ORDER
Defendants make several arguments to support their motion for a protective
order. First, Defendants argue that Mr. Feinstein’s disclosure of attorney-client
privileged documents does not constitute a waiver of attorney-client privilege since
Defendants did not authorize any such disclosure. Dkt. No. 76, (Page ID 2380).
Defendants also claim that although they waived privilege for the limited scope of
Mr. Feinstein attaching Mr. Smith’s billing statements as an exhibit to his
objections, Defendants did not waive privilege for any other purpose. Id., (Page ID
2382). In Exhibit 2, Defendants have attached the email communications between
Mr. Feinstein and Defendants’ current counsel, Mr. Rock, showing the limited
scope of waiver. See Dkt. No. 76-2.

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Second, Defendants argue that the protective order previously entered by
this Court on August 18, 2017 should control to prohibit Plaintiffs from using
privileged information that has been disclosed by Messrs. Feinstein and Shreve.
Dkt. No. 76, p. 7-8 (Page ID 2381-82). The existing protective order mandates the
return of any privileged information inadvertently produced by either party, and
provides that any such disclosure does not constitute a waiver of privilege. See
Dkt. No. 21, p. 11-12 (Page ID 194-95). Defendants claim that the existing
protective order was originally granted to prevent the disclosure of privileged
materials where there had been no waiver of privilege. Therefore, they argue, the
purpose of the existing protective order is essentially the same as the protective
order the Defendants now seek—despite the fact that the protective order applied
to inadvertent disclosure rather than the intentional disclosure presently at issue.
See Dkt. No. 21; Dkt. No. 76, p. 8 (Page ID 2382).
Third, the Defendants seek sanctions against Messrs. Feinstein and Shreve,
both jointly and severally, claiming that Defendants had to file this motion “solely
based on the mass disclosure of privileged documents by Mr. Feinstein and his
counsel.” Dkt. No. 76, p. 9 (Page ID 2383).

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c. PLAINTIFFS’ ARGUMENTS AGAINST PROTECTIVE ORDER
Plaintiffs respond to the Motion for Protective Order with two major
arguments. First, Plaintiffs assert that privilege here has been waived since Mr.
Feinstein and Mr. Shreve are third parties in this case and will continue to have
access to the privileged documents. Dkt. No. 80, p. 6 (Page ID 2404). Plaintiffs
point to Tenn. Laborers Health & Welfare Fund v. Columbia/Hca Healthcare
Corp., 293 F.3d 289 (6th Cir. 2002) in claiming that waiving privilege to one party
constitutes a complete waiver. Dkt. No. 80, p. 6 (Page ID 2404). Additionally,
Plaintiffs argue that the Defendants failed to take prompt steps to protect the
confidentiality of the disclosed documents, precluding their ability to obtain a
protective order. Id., p. 7-10 (Page ID 2405-08).
Second, Plaintiffs argue that counsel are implicitly authorized to waive
privilege on behalf of their clients; thus, Mr. Feinstein waived privilege on behalf
of Defendants because it is likely that Mr. Feinstein disclosed these documents to
Mr. Shreve before withdrawing as Defendants’ counsel. Id., p. 11 (Page ID 2409).
d. ANALYSIS
Mr. Feinstein permissibly revealed Defendants’ privileged communications
pursuant to Michigan Rule of Professional Conduct 1.6(c)(5), which states in
relevant part that:
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(c) A lawyer may reveal: […]
(5) confidences or secrets necessary to establish or collect a fee, or to
defend the lawyer or the lawyer’s employees or associates against an
accusation of wrongful conduct.
MRPC 1.6(c)(5). Mr. Feinstein disclosed the privileged documents used as exhibits
in order to defend himself against sanctions. See Dkt. Nos. 69-70. Therefore, Mr.
Feinstein was defending himself “against an accusation of wrongful conduct.”
MRPC 1.6(c)(5). As a result, his disclosure did not constitute a waiver of privilege
since it was done pursuant to MRPC for the limited scope of defending himself
against accusations of wrongful conduct. It is also important to note that Mr.
Feinstein is not just any third party; he is Defendants’ former counsel. See Dkt. No.
68. Thus, an attorney-client relationship existed between Mr. Feinstein and
Defendants. Id. As discussed above, however, Mr. Feinstein appropriately
disclosed information protected by attorney-client privilege pursuant to MRPC
1.6(c)(5). Since Mr. Feinstein hired Mr. Shreve as his personal attorney in order to
defend himself from the accusations of wrongful conduct, Mr. Feinstein
permissibly disclosed privileged information to Mr. Shreve because he did so
within the scope of Mr. Shreve’s defense of Mr. Feinstein.
The comments to Michigan Rule of Professional Conduct 1.6 provide
guidance as to how an attorney in Mr. Feinstein’s position should proceed in
disclosing confidences:
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In any event, disclosure should be no greater than the lawyer reasonably
believes is necessary to vindicate innocence, the disclosure should be made
in a manner which limits access to the information to the tribunal or other
persons having a need to know it, and appropriate protective orders or other
arrangements should be sought by the lawyer to the fullest extent
practicable.
MRPC, Comments to Rule 1.6. Mr. Feinstein appropriately limited access to the
privileged information in the exhibits to the tribunal and the other parties in the
case, even filing the exhibits to his objections under seal with this Court. See Dkt.
Nos. 69-70. The comments also indicate that the lawyer who is disclosing
privileged information should seek “appropriate protective orders or other
arrangements[…] to the fullest extent practicable.” MRPC, Comments to Rule 1.6.
Mr. Feinstein is no longer Defendants’ counsel as of May 7, 2018; therefore, he
can no longer seek an appropriate protective order on behalf of Defendants. See
Dkt. No. 68. Current counsel for Defendants, however, does seek a protective order
to prevent Plaintiffs from using the privileged information against Defendants. See
Dkt. No. 76. A protective order in this case would adhere to the Comments’
suggestion of obtaining such an order, thus safeguarding the Defendants from any
prejudice stemming from disclosure of privileged information pursuant to
Michigan Rule of Professional Conduct 1.6(c)(5) by Mr. Feinstein.

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The Florida Rules of Professional Conduct contain very similar language in
both its text and comments. Florida Rule of Professional Conduct 4-1.6(c) states in
relevant part:
(c) When Lawyer May Reveal Information. --A lawyer may reveal such
information to the extent the lawyer reasonably believes necessary:
(4) to respond to allegations in any proceeding concerning the lawyer's
representation of the client; or
Fla. Bar Reg. R. 4-1.6(c)(4). The comments to this rule also indicate that an
attorney responding to allegations about his conduct during representation of a
client may disclose confidences in order to secure legal advice:
A lawyer's confidentiality obligations do not preclude a lawyer from
securing confidential legal advice about the lawyer's personal responsibility
to comply with these rules. In most situations, disclosing information to
secure such advice will be impliedly authorized for the lawyer to carry out
the representation.
Fla. Bar Reg., Comments to R. 4-1.6. Therefore, Mr. Feinstein also complied with
the Florida Rules of Professional Conduct by disclosing privileged information to
respond to allegations that would lead to sanctions. Mr. Feinstein was permitted to
disclose privileged information to his attorney, Mr. Shreve, in defending against
such allegations according to the comments of the rule.
Therefore, Mr. Feinstein permissibly disclosed privileged information to
defend against accusations of wrongdoing pursuant to both Michigan Rule of
Professional Conduct 1.6(c)(5) and Florida Rule of Professional Conduct 410

1.6(c)(4). According to the Comments to Michigan Rule of Professional Conduct
1.6, Defendants are permitted to obtain a protective order concerning the privileged
documents disclosed by Mr. Feinstein.
V.

Conclusion
For the foregoing reasons, the Court DENIES Michael L. Feinstein’s

Motion for Short Delay [#81] and GRANTS Defendants’ Motion for Protective
Order [#76]. Plaintiff shall return all privileged documents to Defendants, destroy
any retained copies of privileged documents, and are prohibited from using any
privileged documents disclosed by Mr. Feinstein in this action or in any other
action against the Defendants.
Additionally, neither Mr. Feinstein nor his attorney Mr. Shreve are subject to
sanctions for the disclosure of the privileged documents since they permissibly did
so pursuant to Michigan Rule of Professional Conduct 1.6(c)(5).
SO ORDERED.

Dated: August 8, 2018
/s/ Gershwin A. Drain
U.S. District Court Judge

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CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
August 8, 2018, by electronic and/or ordinary mail.
/s/ Tanya Bankston
Deputy Clerk

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