Dobina v. Weatherford International Ltd. et al

Filing 235

MEMORANDUM AND ORDER denying as moot 220 Motion for Conference; granting in part and denying in part 221 Motion: For these reasons, the plaintiffs' motion to enforce (Docket no. 221) is granted in part and denied in part. The witness summari es discussed above shall be reviewed as described and produced to the plaintiffs within seven days of the date of this order. The defendants' motion for a conference (Docket no. 220) is denied as moot. (Signed by Magistrate Judge James C. Francis on 12/16/2013) Copies Mailed By Chambers. (tn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
IN RE WEATHERFORD INTERNATIONAL
:
SECURITIES LITIGATION
:
:
:
:
:
:
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JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE

11 Civ. 1646 (LAK) (JCF)
MEMORANDUM
AND ORDER

Defendant Weatherford International, Ltd. (“Weatherford”)1
retained counsel to conduct two investigations -- the “Audit
Committee Investigation” and the “Valenzuela Investigation” -- and
subsequently shared information about those investigations with the
SEC.

On November 5, 2013, I ruled that both attorney-client

privilege and work product protection had been waived for “material
[regarding the Audit Committee Investigation] that [Weatherford and
its Audit Committee] provided to the SEC, as well as any underlying
factual material explicitly referenced in it,” as well as for “oral
disclosures made to [] investigative government agencies [regarding
the Valenzuela Investigation], subject to the same limits discussed
in connection with the Audit Committee [Investigation] materials.”
(Memorandum and Order dated Nov. 5, 2013 (“Nov. 5. Order”) at 20,

1

Although there are multiple defendants in this action, for
clarity and convenience I will refer to all defendants collectively
as Weatherford.
1

22).
On November 15, 2013, the defendants produced certain material
to the plaintiffs in accordance with the November 5 Order and
confirmed

that

they

had

previously

produced

all

documents

explicitly referenced in the presentation to the SEC regarding the
Audit Committee Investigation. (Letter of Kevin H. Metz dated Nov.
15, 2013, attached as Exh. E to Declaration of Eli Greenstein in
Support of Plaintiffs’ Motion to Enforce the Court’s November 5,
2013 Order dated Nov. 27, 2013 (“Greenstein Decl.”)).

Later, in

light of further discussions with the plaintiffs, the defendants
agreed to produce portions of summaries of interviews conducted in
connection

with

the

Audit

Committee

Investigation

that

were

prepared by counsel and “read or conveyed in substantial part to
the SEC.” (Defendants’ Opposition to Plaintiffs’ Motion to Enforce
the

Court’s

November

5,

2013

Order

(“Def.

Memo.”)

at

4).

Production of these documents began at the end of November 2013 and
continued into December.

(Letter of Kevin H. Metz dated Dec. 3,

2013, attached as Exh. A to Declaration of Ramzi Abadou dated Dec.
9, 2013; Plaintiffs’ Reply to Defendants’ Opposition to Motion to
Enforce the Court’s November 5, 2013 Order (“Reply”) at 7).

This

motion was filed before that production was complete.
The

crux

of

this

dispute

is

a

disagreement

about

what

constitutes “underlying factual material explicitly referenced in”
2

communications disclosed to the SEC.

Although their opening brief

sought a wider range of information (Memorandum of Law in Support
of Plaintiffs’ Motion to Enforce the Court’s November 5, 2013 Order
(“Pl. Memo.”) at 3-4, 6-7), the plaintiffs now assert that only
“two issues raised by [the] motion [to enforce] remain unresolved”
(Reply at 2):2
1.

Whether Davis Polk & Wardwell, LLP (“Davis Polk”),
the firm retained to conduct the Audit Committee
Investigation, “should be required to produce the
factual
material
underlying
the
interview
summaries” referenced in “written and verbal SEC
presentations” (Reply at 2); and

2.

Whether the redactions in the interview summaries
produced in November and December protect only
opinion work product or also obscure discoverable
factual material (Reply at 2-3).

The plaintiffs’ motion is granted in part and denied in part.
Discussion
A.

Interview Notes and Other Underlying Documents

Weatherford

has

produced

“four

PowerPoint

presentations

[prepared by Davis Polk and] made to the SEC in connection with the
Audit Committee Investigation.”
seek

background

presentations,

material

contending

referenced” therein.

(Pl. Memo. at 2).

apparently

used

that

material

such

(Pl. Memo. at 2-4).

2

in

The plaintiffs
creating
is

these

“explicitly

The plaintiffs argue

In light of this assertion, I treat any other issues raised
in the opening brief as abandoned.
3

that, where the presentations assert that a particular witness made
a statement -- e.g., “Former tax department employee Lisa Covington
.

.

.

alleged

that

.

.

.”

(Weatherford

Audit

Committee:

Presentation to the U.S. Securities & Exchange Commission dated
Nov. 29, 2012 (“11/29/12 SEC Presentation”), attached as Exh. G to
Greenstein Decl., at 60); “In a 2011 interview, Covington cited
release of reserve as [an] example of . . .” (Pl. Memo. at 2;
11/29/12 SEC Presentation at 82) -- or merely suggest that a
statement was made -- e.g., “Kitay’s response was not fully
substantiated” (Pl. Memo. at 2; 11/29/12 SEC Presentation at 45) -interview materials for that witness must be produced pursuant to
the November 5 Order.
The plaintiffs are mistaken. They have pointed to no instance
in

which

interview

materials

are

“explicitly

referenced”

in

presentations to the SEC. Although the examples they cite indicate
(either by implication or direct statement) that an interview took
place and provide the basis for a strong inference that it was
memorialized in some way, interview materials are not identified,
cited, or quoted.

They are not, therefore explicitly referenced.

The fact that testimony buttresses that inference (Pl. Memo. at 45) is similarly insufficient, because the plaintiffs have not shown
that those memorializations were, themselves, explicitly referenced

4

in communications with the SEC.3
The cases the plaintiffs cite do not support their position.
For example, in Gruss v. Zwirn, No. 09 Civ. 6441, 2013 WL 3481350,
at *4, 13 (S.D.N.Y. July 10, 2013) (“Gruss I”), the court ordered
production of interview notes and summaries of interviews because
they were “deliberately, voluntarily, and selectively disclosed to
the SEC via PowerPoint presentations,” by “quoting certain portions
of the interview notes and summaries [] in [] presentations to the
SEC.” Gruss I is thus congruent with my November 5 Order requiring
production of materials actually disclosed to the SEC.4

It says

nothing about what constitutes an “explicit reference” -- which is
really merely a question of what that phrase in the November 5
Order was intended to mean -- or about when material underlying
information disclosed to an investigatory government agency should

3

Of course, representations in the presentations attributed
to witnesses can be explored more fully through “deposition or
other appropriate discovery mechanism.” (Def. Memo. at 12)
4

The district court’s follow-up opinion in Gruss v. Zwirn,
No. 09 Civ. 6441, 2013 WL 6098482 (S.D.N.Y. Nov. 20, 2013) (Gruss
II), discussed in the plaintiffs’ reply (Reply at 5) largely deals
with different issues. The primary question answered there was
whether the client of a law firm that performed an investigation
could be deemed to have within its control the interview notes
created during that investigation. Gruss II, 2013 WL 6098482, at
*3-5. However, Gruss II does help answer the question, addressed
below, of whether a party that discloses portions of a document to
a government agency waives protection for all factual information
included in the document, or only for that information actually
disclosed.
5

be produced. Similarly, in SEC v. Vitesse Semiconductor Corp., No.
10 Civ. 9239, 2011 WL 2899082, at *3 (S.D.N.Y. July 14, 2011), a
report made available to the SEC contained such detailed summaries
of

interviews

that

it

included

interview notes taken by counsel.

near-verbatim

recitations

of

Because of this detail, the

court found that the interview notes had been “effectively produced
. . . to the SEC.”

Id.

That is not the case here.

As Weatherford

explains, “Not one slide [in the PowerPoint presentations to the
SEC] . . . purports to quote a witness, much less Davis Polk’s
interview notes themselves.”
presentations

largely

provide

(Def. Memo. at 9).
generalized

discerned from witness interviews.”

Rather, the

accounts

(Def. Memo. at 8).

of

“facts

Moreover,

Weatherford has now produced portions of interview summaries that
were “read or conveyed in substantial part to the SEC.”

(Def.

Thus, the rule derived from Gruss I and Vitesse --

Memo. at 4).

that information is discoverable if it has been actually disclosed
or

referenced

produced”

to

in
an

such

detail

investigatory

that

it

has

government

been

agency

“effectively
--

has

been

satisfied.
In short, interview materials need not be produced unless
those specific materials are explicitly identified, cited, or
quoted in information disclosed to the SEC.
pointed

to

no

such

explicit

reference,
6

The plaintiffs have
and

their

motion

is

therefore denied on this issue.5
B.

Redactions

The plaintiffs also object to redactions applied to the
interview summaries that Weatherford has produced.6

They seek

production of unredacted copies of the summaries or, in the
alternative, in camera review.

(Reply at 7-8).

A more efficient

resolution, however, is to provide guidance to Davis Polk regarding
the kind of information that is properly redacted and allowing the
firm

a

short

time

in

which

to

re-review

and

re-produce

the

documents.
Gruss I is instructive.

In that case, as noted above, the

court found that work product protection had been waived for
information disclosed to the SEC.

However, the waiver did not

extend only to those portions of notes and summaries actually
disclosed, but rather to all “factual portions” of the partiallydisclosed documents.

Gruss I, 2013 WL 3481350, at *13.

This

5

To the extent that the plaintiffs contend that Weatherford
must produce opinion work product (Pl. Memo. at 5-6; Reply at 3-4),
that question was answered in the November 5 Order, which
restricted production to factual matter. (Nov. 5 Order at 20). I
see no reason to revisit that decision here. I note, too, although
this is not determinative, that the plaintiffs have submitted a
motion to “enforce,” not a motion to reconsider.
6

Although this issue was not squarely raised in the
plaintiffs’ opening brief, that is presumably because all of the
relevant documents had not yet been produced. In light of that,
and the fact that the resolution of this question is fairly simple,
I will address the plaintiffs’ argument.
7

conclusion was re-iterated in Gruss II, where the court did not
limit waiver of protection to those portions of documents actually
disclosed, but rather emphasized that the defendants had “waived
attorney-client and work product protection as to those portions of
the interview notes that constitute fact work product.”

Gruss II,

2013 WL 6098482, at *5 (emphasis added).
Here, Weatherford has produced only the “portions of summaries
. . . that were . . . read or conveyed in substantial part to the
SEC.”

(Def. Memo. at 4).

Perhaps as a result of this crabbed view

of their discovery obligations, it is apparent (as the plaintiffs
note) that the defendants have redacted not only opinion work
product, but also factual material.
appropriate here.

(Reply at 7-8).

That is not

Therefore, Weatherford (or Davis Polk) shall

review the interview summaries produced, redacting only material
that

reflects

an

attorney’s

“‘explicit

mental

impressions,

conclusions, opinions or legal theories,’” Abdell v. City of New
York, No. 05 Civ. 8453, 2006 WL 2664313, at *7 (S.D.N.Y. Sept. 14,
2006) (quoting United States v. Weissman, No. 94 Cr. 760, 1995 WL
244522, at *10 (S.D.N.Y. April 26, 1995)), keeping in mind that, to
the extent that the form of the summarization itself might allow
inferences into the writer’s thinking, such as by “imply[ing] the
attorney’s questions,” those inferences are unlikely to “reveal
anything worthy of the description ‘legal theory.’” In re John Doe
8

Corp., 675 F.2d 482, 493 (2d Cir. 1982); Abdell, 2006 WL 2664313,
at *6 ("[L]ower courts have consistently treated witness statements
as

factual

statements

rather than opinion work product,
have

been

summarized

by

even where

counsel. ") .

The

those

properly

redacted documents shall be produced within seven days of the date
of this order.
Conclusion
For these reasons, the plaintiffs' motion to enforce (Docket
no.

221)

summaries

is granted in part and denied in part.
discussed

above

shall

be

reviewed

as

The witness
described

and

produced to the plaintiffs within seven days of the date of this
order.

The defendants' motion for a conference (Docket no. 220) is

denied as moot.
SO ORDERED.

o

~

Dated:

c., ~~~ .-W-­

JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE

New York, New York
December 16, 2013

Copies mailed this date:
Curtis V. Trinko, Esq.
Law Offices of Curtis V. Trinko, LLP
16 West 46th Street, Seventh Floor
New York, New York 10036

9

Eli R. Greenstein, Esq.

Erik D. Peterson, Esq.

Ramzi Abadou, Esq.

Stacey M. Kaplan, Esq.

Jennifer L. Joost, Esq.

Kessler Topaz Meltzer & Check, LLP

One Sansome st., Suite 1850

San Francisco, CA 94104

Sarah A. Greenfield, Esq.

Latham & Watkins LLP

885 Third Avenue, Suite 1000

New York, New York 10022

Kevin H. Metz, Esq

Latham & Watkins LLP

555 Eleventh Street, NW, Suite 1000

Washington, DC 20004

Peter A. Wald, Esq.

Latham & Watkins LLP

505 Montgomery Street, Suite 2000

San Francisco, CA 94111

Scott W. Muller, Esq.

Raul Yanes, Esq.

Ronni Weinstein, Esq.

Davis Polk & Wardwell LLP

901 15th St., N.W.

Washington, D.C. 20005

10