Bennie et al v. Munn et al

Filing 131

MEMORANDUM AND ORDER that plaintiff's 116 Motion to Compel is denied except to the extent LPL's privilege log contains correspondence between LPL and the defendants. Any emails or letters actually exchanged between LPL and the defend ants shall be produced unless LPL has already produced those documents. Plaintiff's 124 Motion for Hearing on the motion to compel is denied. Plaintiff's 114 Motion to Restrict pursuant to the E-Government Act is granted. A telephonic conference before the undersigned magistrate judge will be held on July 23, 2013 at 9:00 a.m. to discuss the further progression of this case. Counsel for plaintiff shall place the call. Ordered by Magistrate Judge Cheryl R. Zwart. (ADB)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
ROBERT R. BENNIE, JR.,
Plaintiffs,

4:11CV3089

vs.
MEMORANDUM AND ORDER
JOHN MUNN, in his official and individual
capacity; JACK E. HERSTEIN, in his
official and individual capacity; RODNEY
R. GRIESS, in his official and individual
capacity; and JACKIE L. WALTER, in her
official and individual capacity;
Defendants.
This matter is before the court on the plaintiff’s motion to compel, (Filing No.
116), and motion for a hearing regarding its motion to compel, (Filing No. 124). For the
reasons set forth below the motions will be denied.
Plaintiff Robert R. Bennie (“Bennie”) is a registered broker-agent and investment
advisor in the financial industry and was previously associated with LPL, Financial, LLC
(“LPL”) from March 1997 until LPL terminated the association on November 2, 2012.
Bennie brought a Financial Industry Regulatory Authority (“FINRA”) arbitration against
LPL related to the termination of his association with LPL. During the arbitration, LPL
produced over 900 documents and three separate privilege logs.

The arbitration

concluded in September of 2012.

Bennie filed suit against the defendants in this case alleging their actions in
conducting investigations for the Nebraska Department of Banking and Finance violated
Bennie’s constitutional rights in several respects. As a part of this suit, Plaintiff has
served three separate third-party subpoenas upon LPL. The first subpoena was issued on
March 28, 2012.

LPL responded with a letter to Bennie’s counsel raising several

objections to the subpoena and noting the subpoena did not provide LPL sufficient time

to review the requested documents for attorney/client privilege. (Filing No. 118-1).
Counsel for LPL and Bennie’s counsel discussed the objections in May of 2012. Later
that month, LPL produced numerous documents as well as the three privilege logs it
produced in the arbitration between Bennie and LPL. (Filing No. 122-3). Bennie issued
two more third-party subpoenas in February of 2013. LPL again timely objected and
expressly stated it was objecting, in part, based on the attorney/client privilege. (Filing
No. 118-1, at CM/ECF p. 214).

Plaintiff filed a motion to compel seeking full compliance with all of the issued
subpoenas. In response to the subpoenas, the subsequent motion to compel, and the
directive of this court for the parties to diligently work to narrow the unresolved issues
related to the contested subpoenas, LPL produced several thousand documents it believed
to be responsive, but maintains its objection to producing several hundred other
documents based upon its previously stated objections including attorney/client privilege,
work product protection, and that the requests are overly broad. This court ordered LPL
to provide a privilege log and submit the documents in question under seal for an in
camera review to help bring resolution to this matter.

ANALYSIS

Having completed its in camera review of the documents the court finds that the
documents in question are not subject to production.

Overly Broad and Relevance
“Generally, parties may obtain discovery regarding any unprivileged matter so
long as it is relevant to the subject matter of the pending action.” McGowan v. General
Dynamics, Corp., 794 F.2d 361, 363 (8th Cir. 1986). However, the district court may

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limit discovery, particularly where it deems requests are excessively broad and call for
the production of irrelevant information. Id.

The court agrees with LPL that the requested categories of documents are overly
broad and call for the production of documents not relevant to this case. To the extent
Bennie requests all documents between LPL officials, agents and employees between
January 1, 2009 and March, 2012 regarding the plaintiff, the request calls for a number of
documents that are simply not relevant to the present law suit. The court’s review of the
privilege log revealed a number of documents that are responsive to the requests as they
appear in the subpoenas, but are not reasonably calculated to lead to the discovery of
evidence supporting Bennie’s claims against the defendants in this case. See generally
WWP, Inc. v. Wounded Warriors Family Support, Inc., 628 F.3d 1032, 1039 (8th Cir.
2011).

For instance, none of the LPL internal communications addressing Bennie’s

termination, the requests for information by the Nebraska Department of Banking and
Finance, or regarding the third party lawsuit against LPL address Bennie’s
advertisements, political speech, or the investigation performed by the defendants.
These documents are not relevant and need not be produced.

Attorney/Client Privilege
Additionally, LPL’s internal communications identified on the privilege logs are
protected by the attorney/client privilege.

Bennie argues that LPL has waived any

objections based on attorney/client privilege. Fed. R. Civ. P. 45(c)(2)(B) provides that a
person commanded to produce documents may object to the request in writing before the
earlier of the date “the time specified for compliance or 14 days after the subpoena is
served.” Generally all objections must be made at once to prevent discovery from
becoming a “game.” In re DG Acquisition Corp., 151 F.3d 75, 81 (2d Cir. 1998).
Failure to timely object may result in a waiver of objections, including those based on

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attorney/client privilege. Id. However, waiver of objections will not necessarily result
when:

(1) the subpoena is overbroad on its face and exceeds the bounds of fair
discovery; (2) the subpoenaed witness is a non-party acting in good faith;
and (3) counsel for the witness and counsel for the subpoenaing party were
in contact concerning the witness' compliance prior to the time the witness
challenged the legal basis for the subpoena.
McCoy v. Southwest Airlines Co., Inc., 211 F.R.D. 381, 385 (S.D. Ind. 2002) (citations
omitted).

As expressed in In re DG Acquisition Corp., the purpose of the objection
requirement in Rule 45 is to make sure the subpoenaed party does not attempt to delay or
otherwise “game” the discovery process. Although LPL did not list the attorney/client
privilege as an itemized objection to the March 2012 subpoena, LPL did expressly
indicate that it would need to review the requested documents for attorney/client
privilege. Bennie was thereby notified that LPL may be claiming at least some of the
potentially responsive documents were privileged. Bennie cannot legitimately claim he
was unaware LPL was objecting to the subpoenas, in part, based on the attorney/client
privilege. LPL did not waive its right to object to discovery based on the attorney/client
privilege.1

Having found LPL did not waive its attorney/client privilege objection, the court
reviewed the documents identified. The listed documents are privileged. Each of the
communications involves correspondence between an employee of LPL and an LPL in1

Even if LPL had not timely raised the attorney/client privilege objection, it is a thirdparty and communicated with Bennie’s counsel in good faith in the face of excessively broad
discovery requests. Under such circumstances, LPL likely did not waive its right to object to the
requests based on attorney/client privilege.

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house counsel (or a representative of in-house counsel such as a paralegal or secretary)
and are communications requesting or providing legal advice. Such communications are
protected by the attorney/client privilege and are not discoverable. See PaineWebber
Group, Inc. v. Zinsmeyer Trusts Partnerships, 187 F.3d 988 (8th Cir. 1999).

Finally, Bennie asserts that LPL cannot claim the attorney/client privilege for
certain documents because Bennie and LPL were jointly represented by in-house counsel
in defending a suit filed by third-parties and customer complaints. The court need not
make a specific finding that the Bennie and LPL were jointly represented because even if
they were, the shared privilege goes no further than the subject of the joint representation
– customer complaints and third-party suits. To the extent the privilege log contains
communications regarding customer complaints and the law suit and subsequent
arbitration filed by former clients of Bennie’s, those communications are not relevant to
this case.

Work Product
The documents relating to Bennie’s termination also include hand written notes by
Brad Jacobs, LPL’s associate in-house counsel. LPL asserts work product protection for
these notes. Bennie argues that these documents are not eligible for work product
protection because they were not prepared in anticipation of litigation. The notes appear
to have been produced by Jacobs regarding an alleged threat of litigation Bennie made
upon the termination of his association with LPL. Accordingly, they were prepared in
anticipation of litigation and are subject to both ordinary work product protection and
opinion work product because the notes contain Jacobs’ mental impressions. See Baker
v. General Motors Corp., 209 F.3d 1051, 1054-55 (8th Cir. 2000).

Moreover, the

contents of the notes are not relevant to this case, as they make no mention of his
advertising practices, his political speech, or the defendant’s investigation of Bennie.

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IT IS ORDERED:

1)

Plaintiff’s motion to compel, (Filing No. 116), is denied except to the
extent LPL’s privilege log contains correspondence between LPL and the
defendants. Any emails or letters actually exchanged between LPL and the
defendants shall be produced unless LPL has already produced those
documents.

2)

Plaintiff’s motion for a hearing on the motion to compel, (Filing No. 124),
is denied.

3)

Plaintiff’s motion to restrict, (Filing No. 114), is granted.

4)

A telephonic conference before the undersigned magistrate judge will be
held on July 23, 2013 at 9:00 a.m. to discuss the further progression of this
case. Counsel for plaintiff shall place the call.

Dated this 16th day of July, 2013.
BY THE COURT:
s/ Cheryl R. Zwart
United States Magistrate Judge

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