Loguidice v. McTiernan et al

Filing 73

MEMORANDUM- DECISION AND ORDER granting in part and denying in part Pltf's 65 Motion to Compel as stated. Dispositive motion deadline is January 4, 2019. Signed by Magistrate Judge Christian F. Hummel on August 22, 2018. (jdp, )

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK

ANDREA D. LOGUIDICE,
Plaintiff,
v.

1:14-CV-1323
(TJM/CFH)

EDWARD MCTIERNAN, STUART BRODY,
BENJAMIN CONLON, MARLINE AGNEW,
DEBORAH CHRISTIAN, PHIL LODICO,
MARC GERSTMAN, and JOHN DOES 1-5,
Defendants.

APPEARANCES:

OF COUNSEL:

BOIES SCHILLER & FLEXNER LLP
30 South Pearl St., 11 th Fl.
Albany, New York 12207
Attorneys for plaintiff

GEORGE F. CARPINELLO, ESQ.
JOHN F. DEW, ESQ.

NAPOLI SHKOLNIK PLLC
360 Lexington Avenue, 11th Fl.
New York, New York 10017
Attorneys for plaintiff

MICHAEL T. HAWRYLCHAK, ESQ.

NEW YORK STATE ATTORNEY GENERAL
The Capitol
Albany, New York 12224
Attorneys for defendants

COLLEEN D. GALLIGAN, ESQ.

CLARICK GUREON REISBAUM LLP
220 5th Ave., 14th Fl.
New York, New York 10001
Attorneys for nonparties

NICOLE GUERON, ESQ.

MEMORANDUM-DECISION AND ORDER
I. Background
Presently pending before the Court is plaintiff’s second Motion to Compel. Dkt. No.

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65. Defendants Marline Agnew, Stuart Brody, Deborah Christian, Benjamin Conlon, Marc
Gerstman, Phil Lodico, and Edward McTiernan opposed the motion (collectively
“defendants”). Dkt. No. 69. Non-parties Coleman, Hohenstein, Executive Chamber,
Office of the Governor, New York State Department of Environmental Conservation
(“DEC”), and New York Governor’s Office of Employee Relations (“GOER”) also opposed
(collectively “non-parties,” where appropriate). 1 Dkt. No. 70. Plaintiff filed a reply. Dkt.
No. 71. Plaintiff initially filed a motion to compel in November 2015. Dkt. No. 41. On
August 25, 2016, the Court granted in part and denied in part plaintiff’s motion to compel.
Dkt. No. 47. In September 2016, plaintiff filed a Motion for Reconsideration of the August
25, 2016 Decision on the Motion to Compel. Dkt. No. 48. The Court denied the Motion
for Reconsideration. Dkt. No. 51. At issue in the Motion to Com pel currently before the
Court is whether (1) the disclosure of certain documents and testimony demonstrates that
the advice of counsel was “essential” to plaintiff’s termination, and, thus, amounts to a
broad waiver of the DEC’s attorney-client privilege; and (2) raising the Mount Healthy
defense puts the legal advice defendants received about plaintiff’s alleged conflict of
interest at issue, amounting to a broad subject-matter waiver of the DEC’s attorney-client
privilege. See Dkt. No. 65. Plaintiff demands an order compelling defendants to “testify
as to all discussions regarding the decision to terminate Plaintiff’s employment, and order
the [nonparties] to produce any documents withheld under a claim of DEC’s privilege

1

Non-parties note that plaintiff’s motion “largely seeks documents and testimony from
Defendants, not the Non-parties. Since the motion implicates DEC’s attorney-client privilege, DEC joins
Defendants’ opposition brief. The other Non-Parties take no position as to Defendants’ opposition brief.”
Dkt. No. 70 at 1.

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relating to the termination decision.” Dkt. No. 65-1 at 13. For the reasons that f ollow,
plaintiff’s Motion to Compel, Dkt. No. 65, is granted in part and denied in part.

II. Arguments
Plaintiff first argues that defendants have
effected a broad, subject-matter waiver regarding any and all
discussions – including legal advice – about the decision to
terminate the Plaintiff’s employment: Defendants have
produced several documents that disclose attorney-client
privileged communications and privileged work product, and
Defendants have provided testimony revealing some of the
privileged legal advice that they provided and that they
received.
Dkt. No. 65-1 at 5. More specifically, plaintiff argues that this Court concluded that Mr.
Gerstman has the authority to waive the DEC’s privilege, and contends that Gerstman
“and the other Defendants” did waive this privilege by testifying “about certain privileged
discussions and produced documents that contain otherwise privileged information.” Id.
Plaintiff next argues that defendants’ assertion of the Mount Healthy affirmative defense
acts as a separate waiver of the privilege because the defense requires inquiry into the
state of mind of the defendants, and any legal advice they received about plaintiff’s
conduct and termination is relevant to defendants’ states of mind in deciding to terminate
plaintiff. Id. at 12-15. Finally, plaintiff contends that defendants’ selective disclosure of
some privileged advice and work product and withholding of other advice and work
product is “prototypical unfairness” which must result in plaintiff being permitted “to
discover all privileged communications and documents related to the decision to terminate

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Plaintiff’s employment.” Dkt. No. 65-1 at 12.
Defendants argue that the Motion to Compel should be denied because
(1) plaintiff seeks to relitigate issues already decided, (2) defendants and nonparties did
not “claim[] privilege with regard to any fact or information reflected in the only two
documents at issue – the McTiernan Memo and the Brody Personal Notes,
(3) McTiernan did not raise the privilege to decline to answer any questions, (4) the
questions Lodico declined to answer “were all consistent with the Court’s rulings on
Plaintiff’s prior motions,” (5) the questions Conlon declined to answer “were about a
conversation which this Court already held was privileged, (6) plaintiff fails to identify any
documents she believes should be disclosed, and (7) this Court has held that there is no
authority for plaintiff’s argument that “the Mount Healthy defense alone can waive the
attorney-client privilege.” Dkt. No. 69 at 5.

III. Legal Standards
The legal standards for waiver of the attorney-client privilege and work-product
privilege were laid out in great detail in this Court’s prior orders. Dkt. Nos. 47, 51. Thus,
the Court will not fully restate the general law governing attorney-client privilege and
waiver here; thus, reference is made to this Court’s Orders at docket numbers 47 and 51.

IV. Analysis
A. Testimony
1. Gerstman’s Testimony
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Plaintiff argues that Gerstman’s deposition testimony amounts to an independent
waiver of the attorney-client privilege. Dkt. No. 65-1 at 7. Plaintiff contends Gerstman’s
testimony about why he reached out to Volforte demonstrates that he received legal
advice, and relied on that advice. Id. at 7-8. Plaintiff contends that Gerstman’s testimony
is an “independent waiver of the attorney-client privilege because Mr. Gerstman willingly
testified about the legal advice that he received from Mr. Volforte.” Id. at 9.
The first portion of testimony plaintiff contends acts as a waiver is from Gerstman’s
deposition wherein he testified that he sought legal advice from Volforte and GOER
general counsel regarding the decision to discharge plaintiff. Dkt. No. 65-1 at 8.
Gerstman testified that he spoke to Volforte to “make sure it was appropriate legally to
discharge her” as he “didn’t want to violate any laws” in doing so. Dkt. No. 65-4 at 3.
Gerstman then testified that Volforte “said that we were on firm ground if we made a
decision to fire her,” and Gerstman understood that statement to mean that “we were
legally authorized to do so without any repercussions.” Id. at 4.
Although the Court finds that the portion of Gerstman’s testimony about the
reasons why he consulted with Volforte does not amount to waiver of the attorney-client
privilege, his testimony about the legal advice Volforte provided does. Dkt. No. 65-4 at 35. Further, as this Court has previously held, Gerstman – in his role as Executive Deputy
Commissioner – appears to have the authority to waive the attorney-client privilege on
behalf of the DEC. Dkt. No. 47 at 34. By testifying as to the overall advice he received,
Gerstman “testifie[d] concerning portions of the attorney-client communication,” and, thus,
waived the attorney-client privilege on behalf of the DEC.” In re County of Erie, 546 F.3d
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222, 228 (2d Cir. 2008) (quoting Sedco Int’l S.A. v. Cory, 683 F.2d 1201, 1206 (8 th Cir.
1982)).
When this matter was previously before the Court, it did not have before it any
evidence that Gerstman relied on counsel in making the determination to terminate
plaintiff. Dkt. Nos. 43, 47. The Court agrees with plaintiff that Gerstman’s testimony now
elucidates the issue. It is clear that Volforte’s advice to Gerstman and McTiernan was
legal and privileged, and that Gerstman relied on that advice because he testified that he
“felt that we were – after checking with Mike Volforte – we were entirely within our rights to
discharge the probationary employee.” Dkt. No. 65-4 at 3-5. As Gerstman testified as to
the legal advice he received and relied on, this portion of his testimony is an implied
waiver of the attorney-client privilege.

2. McTiernan’s Testimony
Plaintiff does not appear to argue that any of McTiernan’s testimony amounts to an
“independent waiver” of the attorney client privilege. Dkt. No. 65-1 at 9. Plaintiff instead
suggests that McTiernan’s testimony about his discussion with Volforte “makes clear that
the advice provided by Valforte was legal advice, and thus the production of the August 5
memorandum waives the attorney-client privilege on behalf of the DEC.” Dkt. No. 65-1 at
9. Volforte’s testimony that his discussion with McTiernan and Gerstman “involved legal
advice” further supports that conclusion, plaintiff argues. Id. Plaintiff also contends that,
during his deposition, McTiernan inappropriately invoked the attorney-client privilege in
reference to his conversations with Lodico, despite McTiernan’s testifying to privileged
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conversations with Volforte. Dkt. No. 65-1 at 10. Thus, plaintiff argues that, because
defendants waived the privilege, Lodico’s refusal to testify about conversations with
McTiernan was improper. Id. Plaintiff similarly argues that Conlon improperly refused to
testify about conversations with Brody about the propriety/impropriety of plaintiff’s
conduct. Id. The Court agrees that McTiernan’s testimony confirms what was previously
unclear – that the testimony he received from Volforte was legal in nature, and that
McTiernan relied on that legal advice in determining how to handle plaintiff’s alleged
conflict of interest and in the ultimate decision to terminate her. However, as plaintiff does
not argue as such, the Court does not address whether McTiernan’s testimony would
amount to an independent waiver of the attorney-client privilege.

B. Document Production
1. McTiernan Memo
Plaintiff appears to argue that defendants’ release of the McTiernan Memo during
discovery, combined with McTiernan’s deposition testimony, amounts to a broad waiver of
the attorney-client privilege because it demonstrates that advice of counsel was
“essential” to the decision to terminate plaintiff, and, thus, the advice of counsel is “at
issue.” Dkt. No. 65-1 at 7. As this Court has repeatedly set forth, the McTiernan Memo
references that the advice McTiernan received from Volforte was that plaintiff’s “error in
judgment was serious enough to warranted [sic] discipline in the case of a full time
employee and termination of an employee in probation.” Dkt. No. 65-1 at 7 (citing Dkt.
No. 41-14 at 2).
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Defendants contend that release of the McTiernan Memo did not waive the
attorney-client privilege because either the vast majority of the memo is not privileged or
does it does not reference privileged conversations/material. Dkt. No. 69 at 6. Defendants
contend further that this Court has already ruled that the release of the McTiernan Memo
did not amount to broad subject matter waiver, and that there has been no docum ent
produced or testimony provided since that decision “that waived privilege with regard to
any matter for which a privilege has been claimed.” Id. at 8. Defendant’s recounting of
this Court’s prior rulings is not entirely accurate. Instead, the Court ruled that the only
material that appears privileged within the McTiernan Memo is with relation to advice
McTiernan received from GOER and Governor’s Counsel. Dkt. No. 47 at 27. The Court
noted that this portion of the McTiernan memo may contain attorney-client privileged
material if the portion of it referencing the advice McTiernan received was legal advice
from counsel, and not advice he received from personnel employees Cadrette and
Belgrade.2 Id. Addressing the Motion for Reconsideration, the Court noted that, “[t]o the
extent that the Court erred in concluding that DEC cannot waive the privilege with respect
to GOER and Governor’s Counsel, such a finding was harmless for the reasons below.”
Dkt. No. 51 at 9-10. The Court then explained that, although it acknowledged that giving

2

“In making this statement, McTiernan collectively refers to the advice he received about
plaintiff’s conduct. However, it is unclear whether McTiernan is contending that the recommendations he
received to terminate plaintiff were based on the various advisors’ opinions that plaintiff violated certain
laws or whether this advice was also based on a personnel/human resources reason not directly related to
any potential legal violations . . . . It is at least arguable . . . that discussions with GOER would involve
opinions on whether plaintiff violated certain ethics rules or laws. If it is the case that McTiernan,
Hohenstein, Coleman, and Valforte discussed whether plaintiff’s conduct amounted to violations of laws or
regulations, such a request or receipt of legal advice would appear to be an attorney-client privileged
matter.” Dkt. No. 47 at 38.

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of legal advice may implicate the privilege, it did not conclude that the DEC waived the
privilege with respect to conversations between DEC and GOER and Governor’s Counsel
because “it could not be determined from the McTiernan Memo what [defendant]3
discussed with GOER and Governor’s Counsel” and that it was “unclear from the
[McTiernan] Memo whether McTiernan’s reference to the ‘advice’ he received was to the
advice received from personnel or from Governor’s counsel.” Id. at 10. The Court then
concluded that because it was unable to determine whether McTiernan was referring to
conversations with personnel (Cadrette and Belgrade) or GOER and Governor’s Counsel,
the Court cannot decide whether the advice to which McTiernan references is privileged.
Since the Motion for Reconsideration, McTiernan has testified that the relevant
portion of the memo refers to advice from counsel. Dkt. No. 65-5 at 3, 5. His testimony,
along with Gerstman’s, confirms that the advice referenced in the McTiernan Memo
involved the receiving of legal advice relating to plaintiff’s termination. Id.; Dkt. No. 65-4.
McTiernan testified that the advice referenced in the memorandum involved the
“application of law to a particular employee”. Dkt. No. 65-5 at 6. McTiernan testified that
he and Gerstman sought “advice about how to respond to the facts or conclusion that I
had come my way concerning Andrea.” Id. at 3. He sought out Volforte, general counsel
at GOER, to “get confirmation” that the office of personnel provided “appropriate and
prudent” advice. Id. McTiernan testified that Volforte “provided a good framework for
analyzing the situation” and provided him with a “checklist of issues to be considered and

3

The Decision included a typographical error, referring to plaintiff’s discussion with GOER and
Governor’s Counsel. This should have read “defendant” as the Court was referring to McTiernan’s
discussions. Dkt. No. 51 at 10.

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he offered the confirmation or advice that in this circumstance, termination really was the
only option.” Id. at 4.
Similarly, Gerstman testified that he spoke with Volforte about plaintiff because he
“wanted to ensure that we were doing everything within the letter of the law in discharging
her” and “didn’t violate any laws by doing so.” Dkt. No. 65-4 at 3. Gerstman and
McTiernan presented Volforte with the facts surrounding plaintiff’s alleged actions, and
Volforte advised that they were on “firm ground” if they chose to fire plaintiff, which
Gerstman testified he understood to mean that they were legally authorized to fire plaintiff
“without repercussions[,]” such as a “lawsuit . . . challenging the decision.” Dkt. No. 65-4
at 3-4. Gerstman testified that after he spoke with Volforte, he felt that “we were . . .
entirely within our rights to discharge the probationary employee, that that was going to
remedy the situation, and that was sufficient for our purposes.” Id. at 5. As Volforte’s
advice about whether DEC was legally-authorized to terminate plaintiff would amount to
attorney-client privileged communications, the Court determines that this portion of the
McTiernan Memo, Dkt. No. 65-3 at 2, which discloses a portion of this privileged
conversation. Next, it must be decided whether release of the document in discovery
waived the attorney-client privilege, and if so, the extent of the waiver.
Defendants argue that they have “not raised a claim of privilege with regard to
McTiernan and Gerstman’s conversation(s) with Volforte, and McTiernan, Gerstman and
Volforte all answered all questions put to them regarding their discussion(s).” Dkt. No. 69
at 11-12. Because no claim of privilege was raised, defendants argue that the McTiernan
Memo “does not implicate privileged communications between DEC attorneys,” and, as
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such, “Plaintiff has failed to identify any claims of privilege raised by Defendants that
relate to legal advice discussed in the McTiernan Memorandum.” Id. at 12.
Defendants’ argument must fail. Confusingly, defendants appear to concede that
at least one portion of the McTiernan Memo contains privileged information, but argue that
because they did not raise privilege and because defendants testified to these
conversations without raising privilege, the release of the McTiernan Memo does not
amount to a broad waiver of the attorney-client privilege. Dkt. No. 69 at 13. Further,
although defendants may not have raised privilege in the depositions when testifying
about the contents of some of the conversations referenced in the McTiernan Memo –
specifically McTiernan and Gerstman’s conversation with Volforte – it does not follow that
the conversations were not privileged, or that their testimony about such conversations
revealing portions of those conversations, did not amount to waiver of that privilege. As
explained above, it its order on the Motion for Reconsideration, the Court held that a ruling
on the issue whether the release of the McTiernan Memo waived the privilege was
premature, and advised plaintiff that if she were to “bring the contents of these
conversations before the Court, the Court will then address her concerns under the lens of
whether the client, DEC, waived the privilege”. Id. at 11 n.3. This issue is now ripe for
review.
The attorney-client privilege is generally waived “by voluntary disclosure of the
[privileged] communication to another party.” Schaeffler v. United States, 806 F.3d 34, 40
(2d Cir. 2015). It is well-settled that “[w]ith some exceptions, the attorney-client privilege is
automatically waived when a privileged communication is disclosed to a third party or
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litigation adversary.” Scott, 94 F. Supp.3d at 598. The privilege also can further be
waived “when a client asserts reliance on an attorney’s advice as an element of a claim or
a defense,” “testifies concerning portions of the attorney-client communication,” or “places
the attorney-client relationship directly at issue.” In re County of Erie, 546 F.3d at 228.
Because the McTiernan Memo contained privileged information about Volforte’s legal
advice, as confirmed by Gerstman and McTiernan’s testimony, and Gerstman and
McTiernan relied on Volforte’s legal advice referenced in the Memo in terminating plaintiff,
defendants release of the McTiernan Memo during discovery has waived the attorneyclient privilege.
Plaintiff argues that the waiver of the privilege through release of the McTiernan
Memo, along with McTiernan and Gerstman’s testimony about their conversations with
Volforte, means that defendants have waived the privilege with regard to all other
testimony and documents on this topic. Further, plaintiff contends that despite “having
testified regarding privileged discussions with Volforte,” McTiernan improperly invoked the
privilege to decline to testify about discussions he had with Lodico. Plaintiff argues that
Lodico improperly invoked the privilege and declined to testify about his discussion
with/advice he gave to McTiernan or his professional opinion about plaintiff’s conduct,
apparently contending that the McTiernan Memo and McTiernan and Gerstman testimony
waived the privilege, and, thus, Lodico cannot assert the privilege. Dkt. No. 65-1. Plaintiff
similarly argues that Conlon improperly invoked the privilege and refused to testify as to a
July 14, 2014 conversation he had with Brody. Finally, plaintiff argues that defendants
and nonparties improperly “continue to maintain privilege logs that contain thousands of
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documents.” Dkt. No. 65-1 at 11. The Court will address below whether the waiver is
limited to the conversation between Gerstman, McTiernan, and Volforte, or whether the
waiver acts as a broad, subject-matter waiver4 as to all otherwise privileged discussions or
documents involving the determination to terminate plaintiff.

2. Brody Notes
Plaintiff argues that Brody’s notes, the document entitled, “Personal Notes re her
possible violations,” Dkt. No. 65-7, is protected by the work-product privilege, and that the
release of the document further demonstrates waiver of this privilege. The document
referenced Brody’s opinion that it was unnecessary to inform JCOPE of the plaintiff’s
alleged conflict of interest. Dkt. No. 65-7. Brody testified as to his belief that the
document was attorney- work product. Dkt. No. 65-8 at 3. This Court held in its August
25, 2016 Memorandum-Decision & Order that the document, if drafted solely for Brody’s
eyes, would not likely be protected by the attorney-client privilege, but “[i]f anything, this
kind of document would be closer to protected work-product.” Dkt. No. 47 at 44. Further,
the Court noted that defendants did not argue that Brody drafted the document in
anticipation of litigation. Id. The Court’s Decision observed that defendants did not claim
a privilege with respect to the document and the Court “anticipates that defendants will

4

“Subject matter waiver applies where the privilege holder puts the privileged communications in
issue by virtue of his claims or defenses and prejudices the opposing party, in other words, seeks to use
the privilege as both a ‘sword’ and a ‘shield’; whereas a more limited waiver applies if the holder releases
only communications or portions of communications favorable to his litigating position, while withholding
any unfavorable ones, and the opposing party is not prejudiced.” E.E.O.C. v. Johnson & Higgins, Inc., No.
93 CIV. 5481 (LBS), 1998 WL 778369, at *8 (S.D.N.Y. Nov. 6, 1998) (citations omitted).

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testify freely regarding this document.” Id. However, the Court did not have any
questions before it relating to the document, and, thus, it held that it could not direct
defendants to answer questions that had not yet been asked. Id.
Defendants argue that the Brody notes document is attorney-work product and that
its disclosure does not amount to waiver of the attorney-client privilege “with regard to any
other matter.” Dkt. No. 69 at 12-13. Defendants again argue that they acknowledged the
work-product privilege and permitted plaintiff to answer all questions about this document,
but that the release and testimony around this document “did not affect a larger waiver.”
Dkt. No. 69. To support this argument, defendants argue that Brody testified that he
prepared the document “for himself” and did not discuss “this matter with anyone else nor
shared the memorandum with anyone at DEC”; thus, because the document “is limited to
Brody’s investigation of his own personal ethical obligations, was not shared with anyone
else at DEC, and was not part of the decision to terminate Plaintiff, release of this
document and Brody’s testimony regarding the same cannot waive Defendants’ claim of
privilege with regard to some other unrelated privileged communication.” Id. at 13.
Defendants point out that plaintiff did not identify “any document or testimony for which
Defendants have claimed a privilege that should be disclosed in light of the disclosure of
the Brody Personal Notes document.” Id.
Plaintiff appears to argue that disclosure of the Brody notes, considered together
with disclosure of the McTiernan Memo and related testimony further demonstrates an
intent to release only those portions of privileged materials/conversations that benefit
defendants. Dkt. No. 65-1 at 10 (arguing that, “[d]espite these waivers of privilege
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regarding some documents and some discussions” defendants and nonparties “have
continued to invoke privilege to avoid providing some testimony or documents.”). Thus,
plaintiff is suggesting that the disclosure of the Brody notes amounts to “prototypical
unfairness” wherein defendants could release privileged communications favorable to
defendants and withhold unfavorable ones to benefit defendants. Id. at 12.
The Court agrees with parties that the Brody notes document is attorney workproduct, that release of the document waived the work-product privilege, and that Brody’s
testimony about its content independently waives the attorney work-product privilege.5
However, it is a closer question whether the waiver amounts to waiver of the attorneyclient privilege for any other content or, as plaintiff argues, waiver of all attorney-client
privileged material/testimony relating to the decision to fire plaintiff. With the Brody notes,
unlike the McTiernan Memo, there is no testimony about substance of the content
referenced in the Brody document, and defendants demonstrate that Brody did not share
this document with others, so it cannot be said that any defendants relied on its content.
The undersigned agrees that, on these facts, the release of the document does not
independently amount to a broader waiver. Plaintiff appears to suggest that, because
defendants’ states of mind are relevant to the defendants’ defense, considerations
defendants made in determining whether to terminate plaintiff are relevant; however,

5

The analysis remains the same for waiver of attorney-client privilege and attorney work product
privilege. See, e.g., Local 851 of Intern. Bros. of Teamsters v. Kuehne & Nagel Air Freight, Inc., 36
F.Supp. 2d 127, n.3 (E.D.N.Y. 1998) (“[W]hen disclosure is made to an adversary . . . the analysis is the
same for both the attorney-client privilege and work product immunity.”) (citing Intern. Bus. Machines
Corp. v. United States, 37 Fed.Cl. 599 (1997)).

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because it appears that Brody’s notes were not communicated to anyone else, the Court
concludes that it cannot be said that they were relied upon or relevant to any defendants’
state of mind beyond Brody. However, although the Court finds that the release of the
Brody notes does not amount to an independent subject matter waiver of the attorneyclient privilege, because the Court finds that the McTiernan Memo and related testimony,
along with the Mount Healthy defense, to be discussed below, waived the attorney-client
privilege, the Court’s finding that relase of the Brody notes does not change the Court’s
ultimate finding.
In addition, plaintiff contends that several defendants – including McTiernan,
Conlon, Lodico, and Volforte – refused to testify, citing privilege, which should not be
permitted in light of the disclosures which waived the privilege. Specifically, plaintiff
argues, despite “having testified regarding privileged discussions with Mr. Volforte,”
McTiernan improperly invoked the privilege during his deposition to decline to testify about
discussions he had with Lodico. Dkt. No. 65-1 at 10. Plaintiff argues that Lodico
improperly invoked the privilege and declined to testify about his discussion with/advice he
gave to McTiernan or his professional opinion about plaintiff’s conduct, apparently
contending that the McTiernan Memo and McTiernan/Gerstman testimony waived the
privilege, and, thus, Lodico cannot assert the privilege. Id. at 10-11. Plaintiff similarly
argues that Conlon improperly invoked the privilege and refused to testify as to a July 14,
2014 conversation he had with Brody. Id. Finally, plaintiff argues that defendants and
nonparties improperly “continue to maintain privilege logs that contain thousands of
documents.” Id. at 11. The Court will address these claims through its review of the
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scope of the waiver in the following section.

C. Scope of Waiver
The Court must determine the scope of the waiver of the attorney-client privilege as
it relates to the disclosed documents and the related testimony from Gerstman and
McTiernan. The purpose of the attorney-client privilege is to “encourage full and frank
communication between attorneys and their clients and thereby promote broader public
interests in the observance of law and the administration of justice.” In re County of Erie,
546 F.3d at 228 (quoting Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998)).
While “it is well settled that ‘the burden of establishing the
existence of an attorney-client privilege, in all of its elements,
rests with the party asserting it,’” In re Grand Jury Proceedings,
219 F.3d 175, 182 (2d Cir. 2000) (quoting United States v. Int'l
Bhd. of Teamsters, 119 F.3d 210, 214 (2d Cir.1997)), “rules
which result in the waiver of this privilege and thus possess the
potential to weaken attorney-client trust [are] formulated with
caution.”
Hicks v. T.L. Cannon Mgmt. Corp., No. 13-CV-6455W, 2015 WL 5167225, at *2
(W.D.N.Y. Sept. 3, 2015) (quoting In re County of Erie, 546 F.3d at 228)). “In order to
balance this protection of confidentiality with the competing value of public disclosure,”
courts apply the attorney-client privilege “only where necessary to achieve its purpose and
construe the privilege narrowly because it renders relevant information undiscoverable.”
United States v. Mejia, 655 F.3d 126, 132 (2d Cir. 2011) (internal quotation marks and
citation omitted) (quoting Fisher v. United States, 425 U.S. 391, 403 (1976)).
Attorney-client privilege

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“is generally waived by voluntary disclosure of the [privileged]
communication to another party.” Schaeffler, 806 F.3d at 40.
Waiver can be made expressly or implicitly, and “may be
implied in circumstances where it is called for in the interests of
fairness.” In re Sims, 534 F.3d 117, 132 (2d Cir. 2008).
Waiver by implication commonly arises in specific contexts,
including “when a client testifies concerning portions of the
attorney-client communication” and “when a client asserts
reliance on an attorney's advice as an element of a claim or
defense.” In re Cty. of Erie, 546 F.3d 222, 228 (2d Cir. 2008).
In other words, a “party cannot partially disclose privileged
communications or affirmatively rely on privileged
communications to support its claim or defense and then shield
the underlying communications from scrutiny by the opposing
party.”
Ingenito v. Riri USA, Inc., No. 11CV2569 (MKB/RLM), 2015 WL 9412541, at *6 (E.D.N.Y.
Dec. 22, 2015). Further, “where a court determines a party has implicitly waived
attorney-client privilege, similar fairness considerations limit the scope of that waiver to the
subject matter of the disclosed communication.” Id. (quoting In re Grand Jury
Proceedings, 219 F.3d 175, 183 (2d Cir. 2000)).
Here, the Court first finds that the attorney-client privilege was waived with regard
to the all of the advice McTiernan and Gerstman received from Volforte. If it were the
case that defendants did not rely on the advice of counsel as part of an affirmative
defense, the Court likely would have stopped its analysis here, and limited the scope of
the waiver solely to this advice. However, as will be discussed, the Court now finds that
defendants’ reliance on the advice of counsel is a significant portion of its Mount Healthy
defense, and, thus, waiver of the privilege with respect to this advice must result in subject
matter waiver as to all of the legal advice defendants received regarding plaintiff’s alleged
conflict of interest and the legal advisement and considerations from counsel that went
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into the decision to terminate her employment.

D. Mount Healthy Defense
Plaintiff argues, as she did in her prior Motion to Compel, that defendants’
invocation of the Mount Healthy affirmative defense6 waives the attorney-client privilege
regarding all advice defendants’ received surrounding plaintiff’s termination because the
defense puts the bases for defendants’ decision to terminate plaintiff at issue. Dkt. No.
65-1 at 12. In assessing whether defendants would have terminated plaintiff due to the
alleged conflict of interest regardless of her protected speech, plaintiff asserts that the
Court will be required to look into defendants’ state of mind and the factors they would
have considered. Id. at 12-13. Plaintiff argues that the McTiernan Memo and McTiernan
and Gerstman’s deposition testimony, demonstrate that it is indisputable that the advice of
counsel “was a cornerstone of their decision to fire Plaintiff . . . .” Id. at 12. Defendants
argue that their raising the Mount Healthy defense does not result in a broad waiver of the
attorney-client privilege because the defense asserts that they “would have terminated
Plaintiff’s employment regardless of whether she had commenced the Wandering Dago
lawsuit,” which is not an advice of counsel defense. Dkt. No. 69 at 19.
In its August 2016 Decision, the Court acknowledged that the attorney-client
privilege can be waived when a client asserts reliance on an attorney’s advice as an
element of a claim or a defense. Dkt. No. 47 at 50. Further, the Court noted that if

6

The Mount Healthy defense requires the defendant to demonstrate “by a preponderance of the
evidence that it would have taken the same adverse employment action even in the absence of the
protected conduct.” Smith v. County of Suffolk, 776 F.3d 114, 119 (2d Cir. 2015).

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defendants relied on the advice of counsel in making the decision to terminate plaintiff,
they may have placed the content of the privileged communications “at issue.” Id. at 5051. The Court declined, at that time, to decide whether the Mount Healthy defense
waived the privilege because it “is not until defendants are asked whether they relied on
certain communications in making the decision to terminate plaintiff that the undersigned
can assess whether that reliance puts attorney-client privileged advice ‘at issue.’” Dkt. No.
47 at 51. Plaintiff has since demonstrated that at least defendants McTiernan and
Gerstman relied, in part, on the advice of counsel in terminating plaintiff, and that other
defendants – Volforte, Lodico, and Conlon – either gave or received legal advice
surrounding terminating plaintiff or the propriety of her conduct. Dkt. No. 65-4 at 3-5. 7
(Gerstman); Dkt. No. 65-5 at 3 8 (McTiernan); Dkt. No. 65-6 at 3 9 (Volforte); Dkt. No. 65-9

7

“ . . . I wanted to ensure that we were doing everything within the letter of the law in discharging her”; “I
wanted to make sure it was appropriate to legally discharge her . . . That we didn’t violate any laws by
doing so . . . . Any particular state laws that – regarding probationary employees”; in response to whether
Volforte gave advice, “Yeah, I believe so . . . . I believe that he said that he were on firm ground if we
made a decision to fire her . . . I understood that to mean we were legally authorized to do so without any
repercussions.”; “I felt that we were – after checking with Mike Volforte, we were entirely within our rights
to discharge the probationary employee, that that was going to remedy the situation, and that was
sufficient for our purposes.”
8

“Because I was trying to find advice about how to respond to the facts or conclusions that had
come my way concerning Andrea”; stating that he called Volforte “[t]o seek advice” and “in an effort to get
confirmation that advice that I had received from the DEC, office of personnel, was appropriate and
prudent under the circumstances.”; “ . . . asked her, was there something else that should be done, did it
seem like Phil and Ben had this correct, that’s what I remember asking Deb Christian.”; “I remember a
meeting with Phil Lodico where the possibility of termination was discussed.”; referring to conversation
with Lodico: “I believe that in this discussion that we’re referring to, we were running through the various
options available to the department.”; responding to the advice he was given from Voforte: “ . . . if a
permanent employee took some sort of action that in the mind of his or her supervisor, would require
some disciplinary sanction, that when that employee was in the probationary period, they should be
terminated.”; indicating that he was meeting with Christian or Lodico, “to make sure we touched all the
bases, filled in all the gaps, whatever would be required to keep moving, at this point, towards a final
resolution.”; indicating that Volforte informed him that Public Officers Law § 74 “was one of the things we
should consider”; Volforte, “ . . . offered the confirmation or advice that in this circumstance, termination
was really the only option.”; stating that when he spoke with Volforte, he was seeking “[t]he application of

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at 310 (Lodico); Dkt. No. 65-10 at 4 11 (Conlon).
As this Court has previously set forth, Dkt. No. 47 at 47, the Mount Healthy defense
to some extent, is subjective in that it inquires into the defendant’s state of mind.
Although the state of mind element of the Mount Healthy defense may be less significant
than in the oft-cited examples of state of mind defenses – such as an advice of counsel
defense or a good faith defense – the question whether a defendant would still proceed
with an action even in absence of protected conduct is relevant when discovery
demonstrates that defendants relied on counsel’s advice in making their determination to
proceed with a certain course of action. Id. (quoting Smith v. County of Suffolk, 776 F.3d
114, 119 (2d Cir. 2015) (additional citation omitted)). Here, defendants relied, to some
degree, on counsel’s advice in assessing plaintiff’s conduct and deciding to terminate her.
Although there is no indication that defendants solely relied on advice of counsel in
terminating plaintiff, there is no authority holding that defendants had to rely solely on
advice of counsel in making their determination in order for the legal advice to be
considered “at issue.” The Court finds helpful the case of Hicks v. T.L. Cannon Mgmt.

law to a particular employee, the answer is – was perhaps a policy call, perhaps a legal call, I don’t know.”
9

Confirming that he was being asked, at least in part, about legal advice and he provided legal

advice.
10

Noting that the “tenor of the conversation . . . what do we do with a lawyer whose job now
appears significantly affected by the outside activity”; confirming that he provided “advice on questions of
law to Mr. McTiernan”; confirming that he was “asked to give advice about the DEC’s options under the
law.”; noting that at a meeting with McTierna, Conlon, Christian, and possibly Brody, he “probably opined”
on “options available under the Civil Service Law”; indicating that he “believed he did” provide advice on
the Civil Service Law.
11

Confirming that his discussion with Brody was, “in part,” “about the propriety or impropriety of
the plaintiff’s conduct.”; confirming that he went to Brody “in part” to seek advice on a matter of law.”

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Corp., 2015 WL 5167225, at *3-4, a wage and hour case brought under, inter alia, the
Fair Labor Standards Act. In Hicks, the defendants raised the good faith defense in
contending that the plaintiff should not be entitled to liquidated damages. Id. at *4. The
Western District of New York noted that the good faith defense had a subjective
component, requiring the employer to show that “it took active steps to ascertain the
dictates of the FLSA and then act to comply with them.” Id. at *3 (internal citation and
quotation marks omitted). The Court noted that, in raising the good faith defense, which
has a subjective component, the defendants “maintain that they should be permitted to
argue to the jury that they acted in good faith, but to remove from the jury’s evaluation of
their subjective state of mind any consideration of communications with or advice from
counsel.” Id. at *4. The Court concluded that it was clear that the parties relied on advice
of counsel in issuing a wage notice as parties testified to their reliance. Id. The Court
held that defendants could not raise the good faith defense to oppose implementation of
liquidated damages but then “shield from disclosure the very communications with
counsel that they themselves admit informed their belief that the [wage] notice was
adequate.” Id. Thus, the Court concluded the good faith defense amounted to an implied
waiver of the attorney-client privilege.
The Court further concluded that it was irrelevant that the defendants could
“identify other facts contributing to their ‘good faith’ state of mind,” but because they also
relied on advice of counsel in making their determination, “fairness dictates that they not
be permitted to shield from plaintiffs – and ultimately the jury – the substance of the
attorney-client communications that [the defendant’ admitted were part of her decision to
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issue the wage notice central to some of the class claims.” Id.
Although Hicks involves a different defense and legal claims, its rationale applies
equally here. Defendants relied on advice of counsel in terminating plaintiff – they
inquired whether plaintiff violated certain laws and sought confirmation as to whether they
were legally allowed to terminate plaintiff without repercussions. Although it is certainly
likely that defendants relied on other reasons in making their ultimate determination to
terminate plaintiff, it is without cavil that advice of counsel was one of the factors
considered.12
The Court acknowledges, as it did before, that no court has previously held that the
Mount Healthy defense acts as a waiver of the attorney-client privilege where the
defendants relied on the advice of counsel. However, there is also no court that has
appeared to have confronted and rejected this argument. Thus, after careful
consideration, the Court finds that defendants’ raising of the Mount Healthy affirmative
defense has waived the attorney-client privilege. The Court reaches this conclusion
because, as the depositions establish, def endants relied on the advice of counsel in
coming to their ultimate determination to terminate plaintiff, and the Mount Healthy
defense is, in part, a subjective inquiry; thus, defendants have placed the attorney-client
privileged advice at issue.
In so holding, the Court acknowledges the significance of the attorney-client

12

“The Second Circuit has not determined whether a certain degree of reliance on counsel is
needed in order to waiver the privilege.” See Dkt. No. 47 (quoting In Re County of Erie, 546 F.3d at 229)
(noting that the Second Circuit declined to determine whether a certain degree of reliance on advice of
counsel is needed to waive privilege).

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privilege, Schaeffler, 806 F.3d at 40, but to hold otherwise in this case would be to permit
defendants to use the privileged advice as both a “sword and a shield.” See, e.g.,
Giordano v. United States, 3:11-CV-9 (MRK), 2011 W L 1831578, at *2 (D. Conn. Mar. 17,
2011) (citation omitted), which would lead to inequity that this Court cannot ignore as it
would cause prejudice to plaintiff. See generally In re Buspirone Antitrust Litigation, 208
F.R.D. 516, 520 (S.D.N.Y. 2002) (citing cases). Under these circumstances, fundamental
fairness supports a finding that subject-matter waiver has occurred.
In reaching this conclusion, the Court notes that it does not f ind the Mount Healthy
defense to be significantly distinguishable from those defenses courts have repeatedly
held places the attorney advice “at issue,” such as the advice of counsel or good faith
defenses. See, e.g., United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991), cert.
denied, 502 U.S. 813 (1991) (holding that the defendant client's advice of counsel basis
for "good faith belief" as a defense to stock fraud indictment placed the legal advice
evidencing client's knowledge of the law directly in issue); Scott v. Chipotle Mexican Grill,
Inc., 67 F. Supp. 3d 607, 611 (S.D.N.Y. 2014) (“[I]f (1) a defendant claims the defense of
good faith, and (2) that claim can only be scrutinized by examining the disputed
communications, then that defendant has waived the privilege.”) (citations omitted). The
Court makes clear that it is not holding that there is an automatic waiver of the attorneyclient privilege when a defendant raises the Mount Healthy defense, or even that each
defendant who consulted with counsel will have automatically waived the privilege if the
assert a Mount Healthy defense. Rather, the Court holds, where a defendant raises the
Mount Healthy defense and it is clear that he relied on counsel’s advice in taking certain
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actions, where the specific legal advice is relevant to the defendants’ decision, the
attorney-client privilege is waived with respect to advice sought and received in making
that decision. See, e.g., Arkwright Mut. Ins. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh,
Pa., No. 90 Civ. 7811 (AGS), 1994 WL 510043, at *12 (S.D.N.Y. Sept. 16, 1994) (noting
that “[e]ven where a party's state of knowledge is particularly at issue, such as in a case
involving claims of laches” the attorney-client privilege is not necessarily waived unless
“the specific content of legal advice received [is needed] to prove a claim or a defense”).
Here, the Court finds that, because the content of attorney’s advice is needed in
assessing the defendants’ Mount Healthy defense and it is clear that defendants relied on
this advice, there is a subject matter waiver of the attorney-client privilege with respect to
the legal advice received regarding plaintiff’s alleged conflict of interest.
Accordingly, the Court, exercising its “sound discretion,” United States v. Sanders,
211 F.3d 711, 720 (2d Cir. 2000), concludes that the def endants’ raising of the Mount
Healthy defense put the legal advice they received from counsel at issue. Thus,
defendants have waived the attorney-client privilege insofar as it relies to legal advice they
received from counsel as to whether plaintiff’s conduct violated any rules, regulations, or
laws, and/or any legal advice counsel gave regarding whether to terminate plaintiff,
including whether defendants would violate any laws if they chose to terminate plaintiff.

V. Conclusion
WHEREFORE, for the reasons stated herein, it is hereby
ORDERED, that plaintiff’s Motion to Compel, Dkt. No. 65, is GRANTED in part:
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defendants must produce all documents withheld or redacted due to attorney-client
privilege or attorney work-product that contain advice given by counsel or received on the
issues of (1) whether plaintiff’s conduct violated any laws, rules, or regulations, and
(2) considerations relating to the determination to terminate plaintiff; and it is further
ORDERED, that plaintiff’s motion, insofar as she requests further deposition of
named defendants, is GRANTED, insofar as:
(1) plaintiff will be permitted to depose the following defendants: Lodico, Conlon, Volforte,
and McTiernan about conversations relating to plaintiff’s alleged conflict of interest or the
considerations made in deciding to terminate plaintiff that these defendants previously
declined to testify about to due to the attorney-client privilege;
(2) defendants, within thirty (30) days of entry of this Memorandum-Decision and Order ,
must produce any documents previously withheld or redacted on the basis of attorneyclient privilege or attorney-work product if those documents contain legal advice given or
received on the issues of: whether plaintiff’s conduct violated any laws, rules, or
regulations, and considerations given/received relating to the determination to terminate
plaintiff, and if no such documents exist, defendants must provide a clear statement as to
the lack of such documents within thirty (30) days of entry of this Memorandum-Decision
and Order ;
(3) in addition to releasing relevant documents previously withheld or unredacted versions
of documents, within thirty (30) days of entry of this Memorandum-Decision and Order,
defendants must provide plaintiff with either an updated privilege log or a memorandum
that clearly indicates that any documents withheld following this Memorandum-Decision
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and Order on the bases of attorney-client privilege or attorney work-product are unrelated
to the issues of advice given regarding the legality of plaintiff’s conduct or the decision to
terminate plaintiff;
(4) if nonparties have certain privileged documents relating to the issues set forth above or
unredacted versions of documents previously withheld as privileged, nonparties must,
within thirty (30) days of entry of this Memorandum-Decision and Order, disclose such
documents to plaintiff or release a statement indicating that no such documents are in
their possession; and it is further
ORDERED, that plaintiff’s motion to compel, Dkt. No. 65, is otherwise DENIED: the
Court declines to order defendants to pay for the costs of further depositions as
defendants; and it is further
ORDERED, that if plaintiff wishes to hold further depositions, such depositions
must be limited to matters that defendants previously refused to testify to on the basis of
attorney-client privilege or matters that arise following any disclosure of additional
documents, and plaintiff must hold such depositions within sixty (60) days of entry of this
Memorandum-Decision & Order, and must do so at plaintiff’s expense; and it is further
ORDERED, that the dispositive motion deadline is January 4, 2019; and it is further
ORDERED, that the Clerk of the Court serve this Memorandum-Decision and
Order on parties in accordance with the local rules.
IT IS SO ORDERED.
Dated: August 22, 2018
Albany, New York

27