Koumoulis et al v. Independent Financial Marketing Group, Inc. et al

Filing 60

MEMORANDUM AND ORDER re 55 : For the reasons set forth in the attached, the Court affirms, in its entirety, the Memorandum and Order issued in this matter by Magistrate Judge Vera M. Scanlon on November 1, 2013 50 . Ordered by Judge Pamela K. Chen on 1/21/2014. (Attachments: # 1 Exhibit) (Galeotti, Matthew)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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TASSO KOUMOULIS, ET AL.

NOT FOR PUBLICATION

Plaintiffs,

MEMORANDUM & ORDER
10-CV-0887 (PKC) (VMS)

v.
INDEPENDENT FINANCIAL MARKETING
GROUP, INC., ET AL.,
Defendants.
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PAMELA K. CHEN, United States District Judge:

Pursuant to Federal Rule of Civil Procedure (“FRCP”) 72(a), Defendants LPL financial
Corporation (“LPL”), Independent Financial Market Group, Inc., and Astoria Federal Savings
and Loan Association (collectively, “Defendants”) have submitted objections to the
Memorandum and Order issued by Magistrate Judge Vera M. Scanlon on November 1, 2013
(“Order”), regarding (1) Plaintiffs’ motion to compel Defendants to produce documents,
withheld as privileged, that contained communications between Defendants and their outside
counsel concerning internal investigations of Plaintiff Tasso Koumoulis’s discrimination and
retaliation complaints; (2) Plaintiffs’ motion to compel the deposition of Defendants’ counsel
regarding these internal investigations; (3) and Defendants’ motion to compel Plaintiffs to
produce a privilege log. (Dkt. Nos. 55 (“Def. Obj.”) and 50 (Order).)
In the Order, Judge Scanlon found that the majority of information contained in the
documents submitted for in camera review (“Submitted Documents”) was not covered by either
the attorney-client or work-product privilege, and ordered the production of the Submitted
Documents with certain redactions, as well as the remainder of the withheld documents to the

1

extent warranted by the Order.

(Order at 36; Dkt. No. 49 (Submitted Documents with

redactions).) Judge Scanlon also ordered Defendants’ outside counsel, Ann Bradley, Esq., to be
made available for deposition by Plaintiffs. (Order at 36.) Lastly, Judge Scanlon ordered both
parties to submit amended privilege logs that fully comport with FRCP 26, but permitted
Plaintiffs to satisfy this requirement by submitting a declaration in lieu of a privilege log. Id.
In challenging the Order, Defendants contend that Judge Scanlon misapplied the law
relating to privilege and discovery, and made clearly erroneous factual findings. (Def. Obj. at 34.)

Defendants ask the Court to “set aside or modify the Magistrate’s determination that

Defendants produce documents from the privilege log and make Ms. Bradley available for
deposition.” Id. at 25. Defendants also ask that Plaintiffs be required to produce a privilege log,
instead of a declaration. Id. Defendants further seek to have the Court, in ruling on their
objections, consider supplemental evidence that was not before Judge Scanlon at the time she
rendered her decision. Id. at 22-25.
For the reasons set forth below, Defendants’ application to modify or set aside the Order
is DENIED, in its entirety.
I.

Standard of Review
As Defendants acknowledge, a magistrate judge’s ruling on non-dispositive pretrial

matters should not be disturbed by the district judge absent a determination that such findings
were “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); (see Def. Obj. at 5.)
Pursuant to this highly deferential standard of review, magistrate judges are thus afforded broad
discretion in resolving discovery disputes, and reversal is appropriate only if that discretion is
abused. See Conway v. Icahn, 16 F.3d 504, 510 (2d Cir. 1994). “A court abuses its discretion
when its decision rests on an error of law or on a clearly erroneous factual finding, or when its

2

decision-though not necessarily the product of a legal error or a clearly erroneous factual findingcannot be located within the range of permissible decisions.” Arista Records, LL v. Doe 3, 604
F.3d 110, 117 (2d Cir. 2010).

“[A] finding is ‘clearly erroneous’ when although there is

evidence to support it, the reviewing court on the entire evidence is left with the definite and firm
conviction that a mistake has been committed.” CFTC v. Standard Forex, 882 F. Supp. 40, 42
(E.D.N.Y. 1995). Thus, “a party seeking to overturn a discovery order bears a heavy burden.”
AP Links, LLC v. Global Golf, Inc., 08–CV–1730, 2011 WL 888261, at *4 (E.D.N.Y. Mar. 14,
2011).
II.

Defendants Have Failed to Demonstrate that the Order was Clearly Erroneous
In their objections, Defendants do not challenge the legal standards applied by Judge

Scanlon on the privilege issue; rather, they challenge her application of those standards. (Def.
Obj. at 6.) Defendants assert that Judge Scanlon’s finding that the communications between
Defendants and their outside counsel predominantly involved business, not legal, advice, and
were therefore not protected by the attorney-client or work-product privilege, was clearly
erroneous. Id. at 3. Defendants also argue that Judge Scanlon erroneously ruled that any
privilege was waived by Defendants’ assertion of a Faragher/Ellerth defense because
Defendants’ outside counsel “had no role in the investigation other than to render legal advice
for the purpose of preventing retaliation claims and mounting a legal defense,” and “Plaintiffs
have no valid need for this information.” Id.
However, a review of the Submitted Documents, as well as the deposition testimony
offered by Defendants, does not support these contentions. Rather, as Judge Scanlon concluded
after carefully reviewing the Submitted Documents and related evidence, almost all of the
information contained in the Submitted Documents relates to business advice provided by

3

outside counsel to Defendants’ human resources personnel or the factual record of Defendants’
internal investigation, and was not provided in anticipation of litigation. (Order at 23-24.) This
information, therefore, is not protected by attorney-client or work-product privilege. In re Cnty.
of Erie, 473 F.3d 413, 419 (2d Cir. 2007); see also TVT Records v. Island Def Jam Music Grp.,
214 F.R.D. 143, 144 (S.D.N.Y.2003) (“[O]nly those communications related to legal, as
contrasted with business, advice are protected.”) (internal quotation marks omitted).
Furthermore, as Judge Scanlon found, even if the disputed materials were covered by a privilege,
that privilege was waived by Defendants’ assertion of an affirmative defense based on the
reasonableness of Defendants’ internal investigation and efforts to correct the allegedly
discriminatory behavior. Accordingly, based on the entire record before it, the Court is not “left
with the definite and firm conviction that a mistake has been committed,” CFTC, 882 F. Supp. at
42, and affirms the Order in its entirety.
A.

Attorney-Client Privilege

In conducting her analysis, Judge Scanlon was guided by the well-established principle
that “[i]n the context of the attorney-client privilege, ‘legal advice involves the interpretation and
application of legal principles to guide future conduct or to assess past conduct’ . . . . Obtaining
or providing such legal advice must be the “‘predominant purpose’” of a privileged
communication.” Id. (quoting In re Cnty. of Erie, 473 F.3d at 419; Favors v. Cuomo, 285 F.R.D.
187, 198 (E.D.N.Y. 2012) (quoting In re Cnty. of Erie, 473 F.3d at 420)). Judge Scanlon was
also sensitive to the inherent difficulty presented by the communications at issue in this case:
Determining whether Ms. Bradley’s advice was predominantly legal- or business-related
is made somewhat more difficult by the overlapping nature of legal advice and human
resources advice. A primary purpose of a company’s human resources program is to
ensure compliance with the myriad of laws regulating employer-employee relations, such
as the laws raised in this case, as well as, inter alia, wage-and-hour laws, benefits laws
and health-and-safety laws. Even without any attorney’s participation, human resources
4

work may very likely require consideration of relevant laws, and their application to the
facts presented. Despite its legal content, human resources work, like other business
activities with a regulatory flavor, is part of the day-to-day operation of a business; it is
not a privileged legal activity. Thus, just as an employment lawyer’s legal advice may
well account for business concerns, a human resources employee’s business advice may
well include a consideration of the law. Cf. In re Cnty. of Erie, 473 F.3d at 420 (the
“complete lawyer” considers the “risks and costs of taking the advice or doing
otherwise”).
Id. at 26.
In this connection, Judge Scanlon aptly noted two other relevant principles: (1) “the
mere fact that a communication is made directly to an attorney, or an attorney is copied on a
memorandum, does not mean that the communication is necessarily privileged,” id. at 10
(quoting U.S. Postal Serv. v. Phelps Dodge Ref. Corp., 852 F. Supp. 156, 160 (E.D.N.Y. 1994));
and (2) “[i]nvestigatory reports and materials are not protected by the attorney-client
privilege or the work-product doctrine merely because they are provided to, or prepared by,
counsel.” Id. (quoting OneBeacon Ins. Co. v. Forman Int’l, Ltd., No. 04 Civ. 2271 (RWS), 2006
WL 3771010, at *5-6 (S.D.N.Y. Dec. 15, 2006)). Judge Scanlon further noted that Defendants’
assertion of a Faragher/Ellerth affirmative defense, based on Defendants efforts to prevent and
correct the alleged discriminatory behavior, could result in the waiver of otherwise privileged
materials. Id. at 17-18.
With these considerations in mind, Judge Scanlon concluded that “[a]n examination of
the content of the disputed communications shows that their predominant purpose was to provide
human resources and thus business advice, not legal advice.” Id. Judge Scanlon specifically
found that Defendants’ outside counsel, Ms. Bradley, “was not a consultant primarily on legal
issues, but instead . . . helped supervise and direct the internal investigations as a primary adjunct
member of Defendant’s human resources team.” Id. at 24. Judge Scanlon provided a detailed
summary of her analysis of the Submitted Documents:
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These documents show that Ms. Bradley was not a consultant primarily on legal issues,
but instead she helped supervise and direct the internal investigations primary as an
adjunct member of Defendants’ human resources team. She instructed Defendants’
human resources personnel on what actions (including disciplinary actions) should be
taken, when to take those actions, and who should perform them; told Defendants what
should be documented and how it should be documented; drafted written
communications to Mr. Koumoulis responding to his complaints; and drafted scripts for
conversations with Mr. Koumoulis about his complaints. In their emails to Ms. Bradley,
Defendants reported the outcome of actions she directed; asked her what they should do
next; and updated her on new developments. See, e.g., Privilege Log Doc. Nos. 8-9, 22,
26, 29, 31, 35, 37, 48-51, & 53-54. Thus, many of the communications concerned advice
on human resources issues, summaries of fact-related communications and instructions
from outside counsel on conducting the internal investigations.
Order at 24-25 (footnotes omitted).1
Based on its own review of the Submitted Documents, the Court concludes that these
findings are not clearly erroneous and that the vast majority of information contained in the
Submitted Documents relate to business advice concerning LPL’s internal investigation and Mr.
Koumoulis’s complaints and work performance issues. Examples supporting this conclusion are
set forth in Exhibit A hereto.2
In arguing that this determination is clearly erroneous, Defendants seize on Judge
Scanlon’s finding that portions of 10 of the 22 Submitted Documents constituted legal advice
and strategy covered by the privilege. (Def. Obj. at 4, 16.)

Defendants argue that this fact is

sufficient to show that the predominant purpose of all of the disputed communications was to
provide legal advice. (Id. at 15-16.) This argument, however, ignores the actual contents of the
1

In the footnotes, Judge Scanlon further annotated her findings with references to specific
Submitted Documents. Id. at 24-25, n. 18-20. Judge Scanlon also considered the deposition
testimony of Claudia Mellon, an LPL human resources officer, and defense counsel’s statements
during court conferences. See Order at 24 (noting Ms. Mellon’s deposition testimony about
Defendants’ practices with respect to consultation with outside counsel, and defense counsel’s
statement that “some of the withheld communications related to ‘general outside counsel [being]
used in conjunction with performance issues.’”).
2

ECF access to Exhibit A has been restricted to the parties only.
6

documents, which directly contradict this claim, since the overwhelming majority of these
communications discuss how Defendants should conduct the internal investigation and how to
respond to and ameliorate Mr. Koumoulis’s complaints. That a stray sentence or comment
within an e-mail chain references litigation strategy or advice does not render the entire
communication privileged, nor does it alter the business-related character of the rest of the
communication.
Document No. 27 illustrates this point. (See Exhibit A at 4-5.) This document contains
an e-mail from Defendants’ outside counsel, Ann Bradley, Esq., setting forth more than a full
page of detailed, multi-part instructions on how to deal with Mr. Komoulis’s personnel issues,
including a recommendation that Defendants call Mr. Komoulis “to express concern and
disappointment, identify the fundamental problem and find out who he trusts to advise him,” and
goes so far as to prescribe detailed instructions to be given to Plaintiff on how he should conduct
himself with Defendants’ customers. Id.

This advice plainly is not legal advice, but rather

human resources advice on personnel management and customer relations. At the end of the email there is a single sentence containing “action items,” one of which directs Ms. Mellon to
check on the status of Mr. Komoulis’s “EEOC charges.” (Id. at 5.) The text immediately
preceding it strongly suggests that, while there may be a subject matter overlap, it is an entirely
separate topic from the preceding human resources discussion, included in this particular email
merely for convenience. Id. References to litigation strategy or advice in other Submitted
Documents are similarly isolated and limited in nature, and do not relate to the rest of the advice
provided in the e-mails in which they appear. (See, e.g., Exhibit A.) Even viewed in aggregate,
these scattered litigation-related references do not support Defendants’ claims that all

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communications, or any particular communication, between Defendants and their outside
counsel constituted legal advice protected by the attorney-client privilege.
This finding largely disposes of Defendants’ objection that Judge Scanlon “improperly
extended” the waiver principle associated with the Faragher/Ellerth defense to legal advice
provided by Ms. Bradley regarding the internal investigation. (Def. Obj. at 7.) Given that the
majority of outside counsel’s advice was predominantly non-legal, the issue of waiver is largely
irrelevant. Furthermore, even if these communications were covered by the attorney-client
privilege, Judge Scanlon properly concluded that, by asserting a Faragher/Ellerth defense,
Defendants waived that privilege with respect to any documents relating to the reasonableness of
Defendants’ efforts to correct the allegedly discriminatory behavior and the reasonableness of its
investigative policies and practices. (Order at 20); see Angelone v. Xerox Corp., No. 09 Civ.
6019 (CJS) (JWF), 2011 WL 4473534, at *2-3 (W.D.N.Y. Sept. 26, 2011), reconsideration
denied, No. 09 Civ. 6019 (CJS) (JWF), 2012 WL 537492 (W.D.N.Y. Feb. 17, 2012) (defendant
asserting a Faragher/Ellerth defense waives any privilege that might otherwise apply to “[a]ny
document or communication considered, prepared, reviewed, or relied on by [the defendant] in
creating or issuing the [investigatory report]”). 3
Judge Scanlon also correctly concluded that Plaintiffs had a substantial need for these
communications, i.e., to “understand what constituted Defendants’ investigatory procedures” and
“fully test the reasonableness of Defendants’ remedial efforts.” (Order at 31); Cf. Pray v. N.Y.C.
Ballet Co., No. 96 Civ. 5723(RLC), 1998 WL 558796, *3 (S.D.N.Y. Feb. 13, 1998) (finding
defendant’s attorney-client privilege should not be breached where plaintiffs had no need for the
contents of the attorney-client communications). For example, while Defendants may contend
3

Indeed, recognizing this principle, Defendants waived the privilege with respect to their inhouse counsel notes and correspondence relating to the internal investigation. (Order at 30-31.)
8

that they had their own investigatory policies and practices (e.g., Def. Obj. at 13), Plaintiffs
could use Defendants’ communications with outside counsel to prove otherwise. (See Order at
31) (finding that “the communications show that rather than following a pre-determined in-house
policy, Defendants’ procedure was to have outside counsel determine the process as it
developed.”).
Accordingly, the Court affirms the Order with respect to the attorney-client privilege
issue.
B.

Work-Product Privilege

Judge Scanlon concluded that the Submitted Documents failed to demonstrate that the
withheld documents, as a whole, were created in anticipation of litigation and thus were not
protected work-product. (Order at 29.) Judge Scanlon further explained that:
The communications [contained in the Submitted Documents] do not clarify why
documents authored by non-attorneys are purportedly privileged. Defendants have not
offered evidence that any of the documents were created because of litigation, rather than
simply in the course of a human resources investigation. Instead, advice related to
anticipated litigation was occasionally included as an aside in communications that were
predominantly related to human-resources issues.
Id. at 29.
Based on its review of the Submitted Documents, the Court concurs with Judge Scanlon’s
assessment that the communications between Defendants and outside counsel related to human
resources issues, e.g., the internal investigation related to Mr. Komoulis and responding to his
complaints. Such advice would have been provided even absent the specter of litigation, and
therefore do not constitute litigation-related work product. See Shinnecock Indian Nation v.
Kempthorne, 652 F. Supp. 2d 345, 362 (E.D.N.Y. 2009) (even where the document “might also
help in preparation for litigation,” it will not be protected by the work-product doctrine if it was
“prepared in the ordinary course of business” or “would have been created in essentially similar
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form irrespective of the litigation.” ) (quoting State of Maine v. U.S. Dep’t of the Interior, 298
F.3d 60, 69 (1st Cir. 2002)).
Defendants challenge this finding on the basis that Defendants only sought the advice of
outside counsel because of the potential for litigation and, therefore, these communications
categorically constitute work product. (Def. Obj. at 21.) While it may be true that the
possibility of litigation prompted Defendants to seek outside counsel’s advice, the
communications themselves demonstrate that rather than discussing litigation strategy or advice,
Ms. Bradley advised Defendants on how to conduct the internal investigation and how to address
Mr. Koumoulis’s ongoing work performance issues and internal complaints, i.e., human
resources advice that would have been given regardless of a specific threat of litigation. Indeed,
Defendants concede that “LPL ha[d] an obligation to investigate” Koumoulis’s complaints about
alleged discrimination and retaliation,” regardless of the potential for litigation. (Def. Obj. at
21.)4 The alleged motivation for which these documents were sought is not enough to overcome
what appears on the face of the documents themselves.
Even assuming that Ms. Bradley’s advice was given with the possibility of litigation in
mind, this awareness does not convert her advice on dealing with Mr. Koumoulis’s internal
complaints or his work performance issues into advice given in “anticipation of litigation.”
Indeed, Defendants acknowledge that this advice was intended, in part, to prevent Plaintiff from
4

Defendants argue, however, that this fact “does not mean that such investigations cannot be in
anticipation of litigation where, as here, the at-issue investigations took place after Koumoulis
filed an EEOC Charge against [LPL] and [LPL] reasonably anticipated a lawsuit. (Def. Obj. at
21.) However, even assuming the internal investigation was conducted in anticipation of
litigation, otherwise work-product privileged communications relating to the investigation would
still be discoverable once Defendants assert a Faragher/Ellerth defense. Indeed, Defendants
acknowledged as much when they disclosed their in-house attorneys’ notes and correspondence
regarding the investigation. Defendants offer no justification for treating their outside counsel’s
communications regarding the investigation differently than their in-house counsel’s
communications on that topic.
10

bringing claims of retaliation. (Def. Obj. at 2, 21, 24-25.) Legal advice given for the purpose of
preventing litigation is different than advice given in an anticipation of litigation. See, e.g.,
Gucci Am., Inc. v. Guess?, Inc., 271 F.R.D. 58, 74 (S.D.N.Y. 2010) (“The mere ‘possibility’ of
litigation is insufficient to obtain work-product protection.” (quoting Kingsway Fin. Servs., Inc.
v. Pricewaterhouse–Coopers LLP, 03-CV-5560, 2007 WL 473726, at *5 (S.D.N.Y. Feb. 14,
2007) (citing cases)).
Defendants seize on Judge Scanlon’s recognition that the privilege applies to isolated
portions of the Submitted Documents to bolster their claim that she incorrectly failed to find all
of the documents, in their entirety, privileged. (Def. Obj. at 4.) Defendants’ argument appears to
be that the reference to the possibility of litigation in a communication establishes that Ms.
Bradley’s sole function was to provide legal advice in anticipation of such litigation, and that
everything discussed in those communications therefore constitutes work product. But simply
declaring that something is prepared in “anticipation of litigation” does not necessarily make it
so. P. & B. Marina, Ltd. P'ship v. Logrande, 136 F.R.D. 50, 57 (E.D.N.Y. 1991) aff'd sub nom.
P&B Marina Ltd. v. LoGrande, 983 F.2d 1047 (2d Cir. 1992) (“A blanket assertion that the
documents are work-product or reflect anticipated litigation is not sufficient to attach the
immunity.”) As discussed, here, the contents of the communications directly contradict
Defendants’ privilege claim. These communications, on their face, relate to advice given by Ms.
Bradley on how to prevent a lawsuit, not on how to defend one. Indeed, in those few instances
where Ms. Bradley focused on a defensive strategy in anticipation of litigation, Judge Scanlon
ruled that those parts of the communications are protected from discovery. Thus, far from
demonstrating inconsistency in her application of the relevant legal standards, Judge Scanlon’s
limited recognition of the privilege demonstrates the rigor and precision of her analysis.

11

Finally, as previously discussed, Defendants’ assertion of a Faragher/Ellerth defense
further undermines their claim of work product privilege. By asserting this defense, Defendants
waive any otherwise applicable privilege with respect to all documents relating to the
reasonableness of their efforts to correct the allegedly discriminatory behavior and the
reasonableness of their investigatory policies and procedures. See Angelone, 2011 WL 4473534,
at *2-3.
Accordingly, the Court affirms the Order with respect to the work-product privilege
issue.
C.

Privilege Log

Defendants contend that Judge Scanlon “committed clear error” by permitting Plaintiffs
to submit a declaration, instead of a privilege log, documenting advice they received from their
attorney about internal complaints and LPL’s investigation. (Def. Obj. at 21-22; Order at 33-34.)
This contention is meritless.
Judge Scanlon properly exercised her discretion to allow Plaintiffs to use a declaration to
satisfy their disclosure obligation under FRCP 26(b)(5)(A). The rule does not prescribe any
particular format for disclosing privilege claims. So long as Plaintiffs provide Defendants with
the information required by FRCP 26(b)(5)(A), i.e., “the nature of the documents,
communications, or tangible things not produced or disclosed” . . . “in a manner that . . . will
enable other parties to assess the claim,” the format used to do so is irrelevant. Indeed, as Judge
Scanlon noted, Local Civil Rule 26.2 encourages the use of “[e]fficient means of providing
information regarding claims of privilege.” (Order at 34.)
Defendants further argue that Judge Scanlon improperly “shifted the burden” by noting
that Defendants offered no basis why Plaintiffs’ should produce a privilege log rather than a

12

declaration. (Def. Obj. at 21-22; Order at 34.) Defendants either misunderstand or refuse to
accept Judge Scanlon’s simple point: Local 26.2 allows for the most “[e]fficient means of
providing information regarding claims of privilege,” and Defendants provided her no reason to
use one form over another. To the extent that Defendants disagreed with that decision, they bear
the burden of demonstrating why Judge Scanlon’s exercise of discretion was wrong or
prejudicial to Defendants, e.g., that the declaration would not reveal all of the information
required by FRCP 26(b)(5)(A) or necessary for a challenge to Plaintiffs’ assertions of privilege.
They have not done so.
Defendants argue that “[i]f Plaintiffs withhold an otherwise discoverable document on
the basis of privilege, they, no different than Defendants, must provide the information required
by the Rules.” (Def. Obj. at 21.) While this statement is true, it says nothing about the format in
which that information must be provided, nor does the case cited by Defendants in support of
this statement.5 In fact, the declaration format prescribed by Judge Scanlon fully satisfies the
requirements of FRCP 26(b)(5)(A) and requires Plaintiffs to provide all of the information
required by the rule and necessary for Defendants to assess Plaintiffs’ privilege claims.
Accordingly, the Court affirms the Order with respect to the privilege log issue.
III.

Defendants’ Request for the Court to Consider Supplemental Evidence
Defendants ask that if the Court finds, as it has, that they have failed to meet their burden

justifying the setting aside or modification of the Order, it consider supplemental evidence
consisting of the affidavit of Kathy Bakke, LPL Senior Vice President of Human Resources, and

5

In the case cited by Defendants, Bujnicki v. American Paving and Excavating, Inc., 99 CV
0646S (SR), 2004 WL 1071736 (W.D.N.Y. Feb. 25, 2004), the magistrate judge ruled on a series
of motions to compel discovery filed by both parties, and, in sum, directed each side to
supplement their discovery responses.
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deposition testimony of Ms. Bakke and Ms. Mellon. (Dkt. No. 56). This evidence is “new,” in
that it was not presented to Judge Scanlon at the time she rendered her decision on the privilege
issue. The Court declines to consider Defendants’ new evidence.
As the Court previously ruled in response to Defendants’ request to submit this additional
evidence, the district court’s review of a magistrate judge’s non-dispositive ruling under FRCP
72(a) is limited to the evidence that was before the magistrate judge. Compare Fed. R. Civ. P.
72(a) (discussing disposition of non-dispositive matters by magistrate judges without mention of
“receiving further evidence”) with Fed.R.Civ.P. 72(b) (discussing disposition of dispositive
matters by magistrate judges, and expressly allowing the receipt of “further evidence”); see also
State Farm Mut. Auto. Ins. Co. v. CPT Med. Servs., P.C., 375 F. Supp. 2d 141, 158 (E.D.N.Y.
2005).6 Defendants do not cite any legal authority to support its request for the Court to consider
the new evidence.7 Rather, Defendants argue that they “did not have sufficient opportunity
before the Magistrate to submit relevant evidence as the [Order] was not rendered following
motion practice and opportunities to submit affidavits and other evidence.” (Def. Obj. at 22
(emphasis in original)). The Court rejects this contention.
Defendants had ample opportunity throughout the six-month period during which the
parties litigated the privilege and other discovery issues before Judge Scanlon to introduce the
6

Plaintiffs urge the Court to strike Defendants’ objections solely on the basis of their failure to
adhere to the Court’s prior ruling that its consideration would be limited to the evidence before
the magistrate judge and not any “further evidence” offered by Defendants. (Dkt. 57 (“Pl.
Opp.”) at 6-7.) However, in light of the Court’s decision not to consider Defendants’ additional
evidence and to deny the objections on the merits, the request to strike is moot.
7

Defendants note that “[a]t least one court in this Circuit has considered additional evidence in a
privilege dispute, but even this is an overstatement.” (Def. Obj. at 23) (citing Graves v.
Deutsche Bank Sec., 2011 U.S. Dist. LEXIS 140429 (S.D.N.Y. Dec. 5, 2011). In that case,
however, the Court simply mentioned—in a single sentence without explanation—that that the
“additional deposition testimony submitted … offer[ed] no help” to the objecting party. See
Graves, 2011 LEXIS at *5.
14

testimonial evidence it now asks this Court to consider. While the Court will not recapitulate the
entire procedural history, it notes the following facts, which contradict Defendants’ claim of
insufficient opportunity: (1) following a conference before Judge Scanlon on April 8, 2013,
during which Plaintiffs raised a challenge to Defendants’ assertion of privilege, Judge Scanlon
directed the parties, inter alia, to submit a joint letter setting forth their respective positions, if
they could not resolve it themselves (Pl. Opp. at 4-5); (2) the parties submitted their joint letter
on April 16, 2013 (Dkt. No. 39); (3) between the end of April 2013 and September 2013, the
parties communicated with Judge Scanlon numerous times about discovery issues, either in
writing or by telephone, (Pl. Opp. at 5-6); (4) on September 30, 2013, Judge Scanlon directed
Defendants to submit certain of the disputed documents for her in camera review, which
Defendants did on October 3, 2013; (5) on October 25, 2013, Judge Scanlon held a telephone
conference with the parties; and (6) on November 1, 2013, Judge Scanlon issued her decision.
Id. at 6. At no time during the six-month period during which the privilege issue was before
Judge Scanlon, including, most significantly, on April 16th, when the parties filed their joint
letter regarding the privilege issue, or on October 3rd, when Defendants filed the Submitted
Documents for Judge Scanlon’s review. The record clearly establishes that not only did
Defendants have ample opportunity to submit all evidence relevant to the privilege issue, but
they also had notice one month prior to the issuance of the Order as to the specific documents on
which Judge Scanlon would base her decision. Thus, there is simply no merit to Defendants’
claim that they were not provided sufficient opportunity to submit the evidence they now claim
is relevant and ask the Court to consider.
The time to have proffered this evidence was during the six months when the privilege
issue was before Judge Scanlon. Defendants fail to explain why they failed, at a minimum, to

15

include this evidence as part of the April 16, 2013, joint letter, the express purpose of which was
to give the parties the opportunity to set forth their respective positions on the privilege issue.
(Order at 6 (noting that “Defendants did not provide sworn affidavits or additional deposition
transcripts that might have clarified Ms. Bradley’s role . . . .”).)8 Indeed, at that time, the parties
had no reason to believe, or expect, that they would be given any additional opportunity to state
or support their positions.
Defendants argue that the additional evidence warrants consideration because of the
“sacrosanct nature of the attorney-client and work product privileges and the potential sweeping
impact of the [Order.]” (Def. Obj. at 23). However, the gravity of these privileges existed prior
to the Order just as they do now, and yet Defendants did not move to provide the evidence they
now claim is relevant when it would have mattered, i.e., before the magistrate judge who was
deciding the issue. It is now too late to do so. As Judge Kaplan aptly observed in Housing
Works, Inc. v. Turner, 362 F. Supp. 2d 434 (S.D.N.Y. 2005): “[L]itigants cannot be permitted to
use litigation before a magistrate judge as something akin to [a] spring training exhibition game,
holding back evidence for use once the regular season begins before the district judge.” Id. at
438.
In any event, even if the Court were to consider the new evidence offered by Defendants,
it would not alter the Court’s decision. The new evidence proffered by Defendants merely
buttresses arguments that Defendants made to Judge Scanlon about the confidential and
litigation-oriented nature of the purportedly privileged documents. As discussed below, because
8

The failure to do so is noteworthy given that Plaintiffs submitted portions of Ms. Bakke’s and
Ms. Mellon’s depositions with the April 16th joint letter, yet Defendants never sought to
supplement the record with other portions of these witnesses’ testimony. See Order at 24, n. 16
(finding Defendants’ privilege submissions complete where Defendants had “ample time [since
the filing of the parties’ joint letter] to address Plaintiffs’ exhibits or to request permission to do
so.”).
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Judge Scanlon duly considered and rejected Defendants’ position based substantially on her own
review and assessment of the documents, the testimonial evidence offered by Defendants
supporting their own characterization of the documents, even if considered, would have no effect
on the Court’s review of Judge Scanlon’s determinations.
Accordingly, Defendants’ request to have the Court consider the proffered new evidence
is denied.
CONCLUSION
The Court affirms, in its entirety, the Memorandum and Order issued in this matter by
Magistrate Judge Vera M. Scanlon on November 1, 2013.
SO ORDERED:

/s/
PAMELA K. CHEN
United States District Judge
Dated: January 21, 2014
Brooklyn, New York

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