LPD New York, LLC v. Adidas America, Inc. et al
Filing
104
MEMORANDUM AND ORDER granting in part and denying in part 88 Motion to Compel, 89 Motion for Extension of Time to Complete Discovery and 93 Motion to Compel. For the reasons discussed in the attached Memorandum and Order, the Court grants in part defendants' November 6th motion to compel and for sanctions and orders plaintiff to pay defendants a reasonable fee of $7,500 under Rule 37(a)(5)(A); reopens fact discovery for both sides until February 6, 2019, but strikes plaintiff's interrogatories and limits its document requests; and grants plaintiff's motion to compel except as to two emails. Ordered by Chief Mag. Judge Roanne L. Mann on 12/7/2018. (Proujansky, Josh)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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LPD NEW YORK, LLC,
Plaintiff,
MEMORANDUM AND
ORDER
-against-
15-CV-6360 (MKB)
ADIDAS AMERICA, INC., et al.,
Defendants.
---------------------------------------------------------------x
ROANNE L. MANN, CHIEF UNITED STATES MAGISTRATE JUDGE:
Currently pending before this Court is a series of letters from the parties, detailing their
myriad discovery disputes: a motion to compel filed on November 6, 2018, by defendants
adidas America, Inc. and adidas AG (collectively, “defendants” or “adidas”), see Letter
Motion to Compel (Nov. 6, 2018) (“11/6/18 Def. MTC”), Electronic Case Filing (“ECF”)
Docket Entry (“DE”) #88; a letter in opposition thereto filed on November 14, 2018, by
plaintiff LDP New York, LLC (“plaintiff” or “LDP”), see Response in Opposition (Nov. 14,
2018) (“11/14/18 Pl. Opp.”), DE #90; defendants’ November 15th motion to extend discovery
for defendants only, including an unauthorized reply on their motion to compel, see Letter in
Opposition to ECF 90 (Nov. 15, 2018) (“11/15/18 Def. Extension Mot.”), DE #92; plaintiff’s
November 16th motion to compel (“11/16/18 Pl. MTC”), DE #93; defendants’ opposition
thereto, see Response in Opposition (Nov. 21, 2018) (“11/21/18 Def. Opp.”), DE #99, and a
sealed submission, which, in addition to supplying the Court with the documents for in camera
review, supplements defendants’ arguments, see Exhibit in Support of Defendants’ Response in
Opposition (Nov. 21, 2018) (“11/21/18 Def. Supp.”), DE #100 1; and LPD’s unauthorized
Reply in Support of LPD’s Motion to Compel (Nov. 26, 2018) (“11/26/18 Pl. Reply”), DE
#102.
On November 20, 2018, this Court held a lengthy telephonic hearing on the parties’
submissions, heard argument and deferred decision on their discovery motions, and
admonished plaintiff and its counsel for having served no discovery demands during the courtauthorized period for fact discovery, which had closed on November 16, 2018. See Minute
Entry (Nov. 20, 2018) (“11/20/18 Minute Entry”), DE #97. 2 This Memorandum and Order
will not repeat all of the Court’s analysis and comments expressed during that proceeding; the
opinion is intended to set forth the rulings that flow from those discussions, as supplemented
herein, as well as to resolve plaintiff’s motion to compel, which was not fully submitted until
after that proceeding.
DISCUSSION
I.
Defendants’ Motions to Compel, for Sanctions, and to Extend Discovery for
Defendants Only
Defendants’ motion to compel complains that as of November 6th, plaintiff had yet to
respond to defendants’ document demands and interrogatories, despite a due date of September
28, 2018; defendants ask that plaintiff be compelled to respond, “with all objections deemed
waived save those based on privilege”; that plaintiff be ordered to compensate defendant for
1
On December 5, 2018, the Court unsealed the cover letter to the documents submitted for in camera review.
2
Plaintiff claimed, in an argument rejected by the Court, to have mistakenly believed that discovery had been
bifurcated. See 11/14/18 Pl. Opp. at 2.
2
their “reasonable expenses incurred in making the motion, including attorney’s fees”; and that
fact discovery be reopened for 60 days for defendants only. See 11/6/18 Def. MTC at 1, 3;
see also 11/15/18 Def. Extension Mot. In its response of November 14th, plaintiff asserts that
it has now completed its document production and has not withheld documents other than those
protected by the attorney-client privilege. See 11/14/18 Pl. Opp. at 2. Defendants counter
that plaintiff has not shown good cause to reopen discovery for plaintiff’s benefit; they also
complain that plaintiff’s belated discovery responses are deficient, in that LPD’s interrogatory
responses were not signed and verified and its production of over 59,000 pages of documents
does not comply with the ESI production protocol proposed by defendants last February. 3 See
11/15/18 Def. Extension Mot.
A. Reasonable Attorneys’ Fees as a Sanction
As the Court made clear during the November 20th hearing, plaintiff’s lack of diligence
in both providing and conducting discovery will not be countenanced. For that reason, the
Court directed defendants to submit a breakdown of the fees sought as a sanction, see 11/20/18
Minute Entry at 1, and defendants have done so, see Bill of Costs (Nov. 21, 2018) (“Bill of
Costs”), DE #101. Defendants are demanding a total of $15,949 in attorney’s fees claimed to
have been incurred in connection with defendants’ motion to compel. See id. However, Rule
3
The Court directed plaintiff to comply with the ESI protocol by December 6, 2018. Plaintiff thereafter assured
the Court on November 26 that it was “finaliz[ing] arrangements to produce all metadata and other particulars for
those already-produced materials.” 11/26/18 Pl. Reply at 3.
If it has not already done so, plaintiff must promptly sign and verify its interrogatory responses. See Fed. R.
Civ. P. 33(b).
3
37(a)(5)(A) authorizes the Court, in the circumstances presented here, to require the party that
failed to make timely disclosures to pay the movant its “reasonable expenses incurred in
making the motion, including attorney’s fees.” Fed. R. Civ. P. 37(a)(5)(A) (emphasis added).
The Court has reviewed defendants’ “Bill of Costs” and agrees with plaintiff that defendants’
request for nearly $16,000 is excessive, disproportionate to the tasks involved, and includes
work that would have been performed (e.g., reviewing plaintiff’s document production) even
absent defendants’ motion to compel. See 11/26/18 Pl. Reply at 3. In addition, the time
entries include tasks that are clerical in nature yet billed at a rate of $445 per hour. See Bill of
Costs, 11/6/18 HFF entry. That said, plaintiff’s proposal that the fee award be limited to
$3,920, see 11/26/18 Pl. Reply at 3-4, is unreasonably low. The Court concludes that a
reasonable fee award sanction is $7,500.
B. Reopening of Discovery, With Limitations
As for the parties’ competing motions to reopen discovery, this Court would be amply
justified in finding that plaintiff had not shown good cause to reopen fact discovery. See
generally Fed. R. Civ. P. 16(b)(4). Defendants are not, however, opposing a scheduling
modification; on the contrary, they seek to reopen discovery but only for them and not for
plaintiff. The issue thus before the Court is whether, if discovery is reopened, LPD should be
further penalized for its attorneys’ derelictions. In resolving this issue, the Court has
considered whether defendants would be unfairly prejudiced by allowing plaintiffs C albeit
belatedly – to conduct further fact discovery. The Court concludes that given defendants’
request that it be permitted to conduct additional fact discovery, the just and fair result is to
4
allow plaintiff – within limits, as discussed below – to do so as well.
Therefore, the Court is prepared to reopen fact discovery for both sides until February
6, 2019. That said, plaintiff is not entitled to a complete “do-over”: plaintiff, without
authorization, first served its Interrogatories (DE #94) and Request for Production of
Documents (DE #95) on November 19, 2018, after fact discovery had already closed. To
require defendants to respond to all of plaintiff’s many demands, with the holidays fast
approaching and an upcoming (extended) discovery deadline, would be manifestly unfair to
defendants as well as the Court, which likely will be asked to field the parties’ inevitable
discovery disputes.
In the course of the hearing on November 20, 2018, plaintiff’s counsel sought to justify
LPD’s failure to serve formal discovery demands by stating that defendants had agreed that
they would produce all emails with or relating to plaintiff; in other words, plaintiff assumed
that defendants’ production of documents described in their initial disclosures would supply
plaintiff with the discovery it needed to prosecute its claims. Given plaintiff’s failure to serve
its discovery demands until after the close of fact discovery; the expansive nature of those
demands, which seek information well beyond that encompassed within defendants’ initial
disclosures; and the need to streamline the remaining discovery to allow for its completion
within the reopened discovery period, this Court exercises its discretion to limit plaintiff’s
demands as follows: Plaintiff’s belated Interrogatories are stricken in their entirety, and
plaintiff’s request for documents is narrowed to exclude those demands that are unrelated to
plaintiff or the “collaboration,” including but not limited to contracts with third parties.
5
Plaintiff will be permitted to conduct depositions within the reopened period for fact discovery.
II.
Plaintiff’s Motion to Compel
Plaintiff’s November 16th motion to compel challenges the sufficiency of defendants’
production of emails “with and/or about Plaintiff,” as well as defendants’ privilege log, and, in
addition, seeks the production of five specified documents in unredacted form, as well as the
Mann/Gray emails on 3/16/15, which were withheld in their entirety. See 11/16/18 Pl. MTC.
Defendants oppose plaintiff’s motion, on the grounds that (1) plaintiff failed to meet and confer
before filing the motion; 4 (2) defendants satisfied their initial disclosure obligation by
describing the category of documents on which they might rely to support their defenses and,
absent a timely document request, were not required to produce any documents under Rule
26(a)(1)(A)(ii); and (3) defendants likewise were not required by that Rule to produce a
privilege log for withheld documents on which they do not intend to rely. See 11/21/18 Def.
Opp.
A. Defendants’ Procedural Challenges
Defendants are correct that Rule 26(a)(1)(A)(ii) imposes no obligation to produce
documents identified thereunder in initial disclosures absent a timely document request. See
11/21/18 Def. Opp. at 1-2 (citing Silverman v. City of New York, No. 98-CV-6277, 2001 WL
1776157, at *6 (E.D.N.Y. Nov. 19, 2001)). Nevertheless, courts in this Circuit have made
clear that the obligation to produce the described documents will be triggered “by either a
4
The Court declines to resolve this dispute on that basis, but cautions both sides that it will no longer tolerate the
kind of posturing that has been masquerading as good-faith efforts to resolve their discovery squabbles.
6
formal or informal discovery request.” Coppola v. Bear Stearns & Co., Inc., No. 1:02-CV1581 FJS/RFT, 2005 WL 3159600, at *7 (N.D.N.Y Nov. 16, 2005) (collecting cases); accord
A.V.E.L.A., Inc. v. Estate of Marilyn Monroe, No. 12 Civ. 4828(KPF)(JCF), 2014 WL
1408488, at *2 (S.D.N.Y. Apr. 11. 2014). Although plaintiff served no formal document
demands until after fact discovery had closed, it is undisputed that as early as February 23,
2018, plaintiff made an informal demand that defendants produce “Emails with and/or about
Plaintiff[,]” 11/26/18 Pl. Reply at 1 & Ex. 1, thereby triggering defendants’ obligation of
production. And it is no answer to say that defendants, in their Rule 26(a)(1)(A)(ii)
disclosure, had intended to limit the referenced emails to only those on which defendants might
rely, and thus had no need to provide a privilege log; once plaintiff informally demanded
production of all emails with and/or about plaintiff, all such documents should have been
produced, but for those withheld and properly identified on a privilege log. Cf. S.E.C. v.
Merkin, No. 11-23585-CIV., 2012 WL 3203037, at *4 (S.D. Fla. Aug. 3, 2012) (where “the
materials were not requested . . . the SEC was not obligated to place them on a privilege
log.”); see also Lennar Mare Island, LLC v. Steadfast Ins. Co., No. 2:12-cv-02182-KJMKJN, 2015 WL 4910468, at *8 (E.D. Cal. Aug. 17, 2015) (“In this court’s view, providing a
privilege log with initial disclosures would be consistent with the purpose animating the initial
disclosure requirement.”).
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B. Defendants’ Claims of Privilege
Plaintiff’s motion to compel challenges defendants’ assertions of attorney-client
privilege in connection with redactions of five documents 5 and withholding of two others. In
particular, plaintiff faults defendants for impermissibly redacting sender, recipient and date
information. See 11/16/18 Pl. MTC at 2. Supporting its argument with caselaw, plaintiff
additionally assaults the redactions as relating to discussions that appear to be of a business
nature rather than for the purpose of seeking or providing legal advice. See id. (collecting
cases). As plaintiff further notes, several of the redactions are to communications not between
client and counsel. See id. at 2-3.
After resisting disclosure on the procedural grounds disposed of above, see 11/21/18
Def. Opp. at 1-3, defendants turn to the merits, asserting that, to the extent that plaintiff’s
motion is not held to be moot, “the Court [should] deny these portions of LPD’s motion as
unsupported by the law[,]” id. at 3. Defendants provide no further explanation, evidentiary
showing, or legal analysis. Defendants supplement this perfunctory assertion in the cover
letter accompanying their in camera submission of the disputed documents; there they offer to
confer with plaintiff to resolve their dispute by “(1) providing the ‘exact dates’ [of redacted
communications]; (2) unredacting certain ‘sender, recipient, and date information’ . . . ; (3)
5
One of the disputed documents on the privilege log is also claimed to be protected by work product immunity.
See Privilege Log, PrivNum 9, DE #93-2.
The sequential numbers assigned to each document listed on the Privilege Log (as distinguished from the Bates
numbers, which also are reflected on the Log) are designated as “PrivNum.” For ease of reference, the Court
uses only the last three digits of the Bates number. The documents withheld in their entirety, e.g., PrivNum 17,
were not assigned Bates numbers.
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providing more detailed privilege log descriptions; (4) providing affidavits attesting to the
nature of the protection; (5) permitting an attorney-only inspection of portions of documents
that evidence the privileged nature of the communications[.]” 11/21/18 Def. Supp. at 1. 6
As a matter of law, plaintiff is entitled to disclosure of the dates of the redacted
communications, as well as the identities of the parties thereto. 7 See Renner v. Chase
Manhattan Bank, NO. 98 CIV. 926 (CSH), 2001 WL 1356192, at *1 (S.D.N.Y. Nov. 2,
2001). Defendants’ first and second offers therefore would provide plaintiff with information
that should not have been withheld in the first place. As for defendants’ offer to provide more
detailed privilege log descriptions and affidavits, defendants failed to avail themselves of that
opportunity in a timely fashion. When plaintiff filed its letter-brief to compel disclosure of
communications claimed to be privileged, defendants opposed the motion on procedural
grounds, rather than addressing the merits of their assertions of privilege. Defendants’
“failure to meaningfully engage with [plaintiff’s] arguments amounts to a waiver of their
opportunity to respond.” Abreu v. Fairway Mkt. LLC, 17-CV-9532 (VEC), 2018 WL
3579107, at *1 (S.D.N.Y July 24, 2018); see Rosenblatt v. City of New York, No. 05 Civ.
5521(GEL), 2007 WL 2197835, at *7 (S.D.N.Y. July 31, 2007) (Lynch, J.) (“Plaintiff
effectively concedes defendants’ other arguments . . . by her failure to respond to them
. . .”); see generally Abrahams v. Young & Rubicam Inc., 79 F.3d 234, 237 (2d Cir. 1996).
6
Defendants offer, in the alternative, to “negotiate[e] limited waivers [and] withdraw the privilege log entirely.”
11/21/18 Def. Supp. at 1. Defendants fail to explain what they mean by this alternative proposal.
7
The redaction of such information is, in any event, largely pointless, as much of this same information is
disclosed in the Privilege Log.
9
.
On this ground alone, the Court would be justified in granting plaintiff’s motion to compel in
its entirety.
Moreover, as the proponents of the privilege, defendants bear the burden of
establishing the applicability of both the attorney-client privilege and the work product
doctrine, see United States v. Constr. Prods. Research, Inc., 73 F.3d 464, 473 (2d Cir. 1996),
and that burden cannot be discharged with conclusory or ipse dixit assertions, see In re Grand
Jury Subpoena dated Jan. 4, 1984, 750 F.2d 223, 225 (2d Cir. 1984). Defendants also have
the burden of showing that the privilege has not been waived. See Norton v. Town of Islip,
No. CV 04-3079(PKC)(SIL), 2015 WL 5542543, at *3 (E.D.N.Y. Sept. 18, 2015); Rank Grp.
Ltd. v. Alcoa, Inc., No. 12 Civ. 3769(VSB)(RLE), 2014 WL 1883505, at *2 (S.D.N.Y. May
9, 2014). Defendants have failed to carry their burden, “particularly in the glaring absence of
any supporting affidavits . . . .” Constr. Prods., 73 F.3d at 474.
Despite defendants’ waiver and insufficient showing, the Court has examined the
disputed documents in camera in order to assess the withheld communications “in light of the
general context in which they were prepared . . . .” AIU Ins. Co. v. TIG Ins. Co., No. 07
Civ. 7052(SHS)(HBP), 2008 WL 4067437, at *10 (S.D.N.Y. Aug. 28, 2008), modified on
reconsid. on other grounds, 2009 WL 1953039 (S.D.N.Y. July 8, 2009). With a few
exceptions noted below, the disputed communications do not on their face appear to be
privileged. The first communication on the Privilege Log, PrivNum 1, Bates #ADIL005, DE
#100-1 at 1, simply transmits to in-house counsel Sara Vanderhoff prior emails between
corporate non-lawyers. “Such transmittal letters . . . that do not include legal advice nor
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disclose privileged matters are not subject to the attorney-client privilege.” P&B Marina,
L.P. v. Logrande, 136 F.R.D. 50, 54 (E.D.N.Y. 1991), aff’d, 983 F.2d 1047 (2d Cir. 1992);
see EEOC v. Episcopal Diocese of Long Island, CV06-5302 (ERK)(WDW), 2009 WL
10702666, at *4 (E.D.N.Y. Dec. 7, 2009).
A few of the redacted documents between non-lawyers contain references to in-house
counsel, see PrivNum 3, ADIL026, DE #100-3 at 1; PrivNum 4, ADIL050, DE #100-4 at 1
(same redaction as ADIL026); PrivNum 9, ADIL142, DE #100-5 at 3; 8 such references do
not, without more, bring those communications within the ambit of the privilege. See Renner,
2001 WL1356192, at *1 (“[N]ot all documentary references to attorney-client communications
or [to] that relationship fall within the privilege.”).
Nor have defendants, by including in the Privilege Log the unsubstantiated assertion
“communications in furtherance of investigation undertaken at the request of counsel”
(Privilege Log, PrivNum 14 [DE#100-09 at 1] and PrivNum 17 [DE #100-10 at 1]), sustained
their burden of establishing that the attorney-client privilege applies to communications to or
between business personnel. See AIU Ins., 2008 WL 4067437, at *9-10 (“conclusory
affirmations” alleging that numerous documents were prepared “at the direction of counsel”
were insufficient to sustain the privilege proponent’s burden of establishing that business-
8
There are multiple copies of various redacted or withheld email communications; some of those duplicates are
consistently redacted, compare PrivNum 3, ADIL026, DE #100-3 at 1, with PrivNum 4, AIL050, DE #100-4 at
1, while others are not, compare PrivNum 9, ADIL140-ADIL141, DE #100-5 at 1-2 (redacted), with ADIL146,
DE #100-5 at 7 (not redacted), ADIL151, DE 100-6 at 2, and ADIL168-69, DE#100-7 at 5-6 (not redacted);
compare ADIL142, DE #100-5 at 3 (redacted, although not reflected on privilege log), with ADIL148, DE #1005 at 9 (not redacted), and ADIL170, DE#100-7 at 7 (not redacted).
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related communications between corporate employees were for the purpose of obtaining legal
advice).
A few emails on their face, without supporting declarations, do satisfy defendants’
burden of establishing their assertion of privilege. A redacted email dated May 20, 2015,
from Paul Jackiewicz to in-house counsel Sara Vanderhoff, PrivNum 2, ADIL018, DE #100-2
at 1, appears to be a communication made for the purpose of seeking legal advice. Likewise,
a redacted email dated April 24, 2015 at 10:16 a.m., from Whitney Grant to in-house counsel
Paul Loving, PrivNum 9, ADIL140, DE #100-5 at 1, appears to be a communication from the
client to an attorney for the purpose of obtaining legal advice and may tend to reveal advice
from the attorney. Although defendants’ failure to address plaintiff’s privilege challenges on
the merits would justify granting plaintiff’s motion in its entirety, the Court will allow those
disputed documents to remain redacted.
Two of the redacted emails in the disputed email chains, which are between nonlawyers, with in-house counsel copied on those communications, present thornier questions as
to whether they should be protected from disclosure. See PrivNum 9, ADIL140-ADIL141
(emails at 9:28 a.m. and 8:55 a.m.), DE #100-5 at 1-2 (duplicated without redactions at
ADIL146, DE#100-5 at 7; ADIL151, DE#100-6 at 2; ADIL168-ADIL169, DE#100-7 at 5-6).
That attorneys were copied on communications between business personnel does not, by itself,
entitle the communications to protection. See U.S. Postal Serv. v. Phelps Dodge Ref. Corp.,
852 F.Supp. 156, 160 (E.D.N.Y. 1994) (“[T]he mere fact that a communication is made
directly to an attorney, or an attorney is copied on a memorandum, does not mean that the
12
communication is necessarily privileged.”); accord Spread Enters., Inc. v. First Data Merch.
Servs. Corp., No.CV 11-4743(ADS)(ETB), 2013 WL 618744, at *2 (E.D.N.Y. Feb. 19,
2013); AIU Ins., 2008 WL 4067437, at *10.
The Court concludes that defendants have not sustained their burden as to those two
emails. Even assuming arguendo that the contents of the emails are privileged, otherwise
privileged communications to, from, or involving in-house counsel lose protection if they are
disseminated beyond those business personnel that need to know “the content of the
communication in order to perform [their] job[s] effectively or to make informed decisions
concerning, or affected by, the subject matter of the communication[.]" Scholtisek v. Eldre
Corp., 441 F.Supp.2d 459, 464 (W.D.N.Y. 2006); see Norton, 2015 WL 5542543, at *3; 3
Jack B. Weinstein & Margaret A. Berger, Weinstein's Federal Evidence § 503.22[4][a]
(Joseph M. McLaughlin ed., 2006) (communications distributed to employees are confidential,
"provided that those persons, because of the structure of the corporation, must know of the
communication in order to insure that full and accurate information is provided to the
attorney"). Defendants have not identified the roles of the various parties to those discussions
and whether they fall within the circle of those who “needed to know.”
In addition, both of the emails have already been disclosed in other portions of
defendants’ document production. See supra note 8. Though defendants purport to invoke an
inadvertent-disclosure clawback provision in a proposed protective order that they drafted but
that apparently was never adopted, their failure to have redacted all allegedly privileged emails
in their relatively modest production of documents raises questions as to whether their conduct
13
was so careless as to negate a finding of inadvertence. See generally Jacob v. Duane Reade,
Inc., No. 11 Civ. 0160(JMO)(THK), 2012 WL 651536, at *3-6 (S.D.N.Y. Feb. 28, 2012);
Fed. R. Evid. 502(b). Simply put, defendants have made no showing to support a finding that
they employed reasonable measures to prevent the disclosure of privileged materials and that
they acted promptly to rectify the disclosure of the allegedly privileged emails. See id.
But for PrivNum 2, ADIL018, DE #100-2 at 1, and PrivNum 9, ADIL140, DE #100-5
at 1 (10:16 a.m. email), plaintiff’s motion to compel is otherwise granted, and defendants’
request for sanctions defending that motion is denied as moot.
CONCLUSION
For the foregoing reasons, the Court grants in part defendants’ November 6th motion to
compel and for sanctions and orders plaintiff to pay defendants a reasonable fee of $7,500
under Rule 37(a)(5)(A); reopens fact discovery for both sides until February 6, 2019, but
strikes plaintiff’s interrogatories and limits its document requests; and grants plaintiff’s motion
to compel except as to two emails.
SO ORDERED.
Dated:
Brooklyn, New York
December 7, 2018
/s/
Roanne L. Mann
ROANNE L. MANN
CHIEF UNITED STATES MAGISTRATE JUDGE
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