Pacific Life Insurance Company et al v. The Bank of New York Mellon
Filing
207
ORDER: The Court upholds the claim of attorney-client privilege as to the entries described above. For those entries as to which the Court rejected the claim of privilege outright, Defendant is directed to produce the documents within 30 days of the date of this Order. For those entries as to which the Court permitted supplemental briefing, Defendant is to submit such briefing within 30 days of this Order. (Signed by Judge Katherine Polk Failla on 11/23/2020) (rro)
Case 1:17-cv-01388-KPF Document 207 Filed 11/23/20 Page 1 of 14
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
PACIFIC LIFE INSURANCE COMPANY and :
PACIFIC LIFE & ANNUITY COMPANY,
:
:
Plaintiffs,
:
:
v.
:
:
THE BANK OF NEW YORK MELLON,
:
:
Defendant. :
:
------------------------------------------------------ X
17 Civ. 1388 (KPF)
ORDER
KATHERINE POLK FAILLA, District Judge:
This Order resolves certain disputes among the parties regarding
Defendant Bank of New York Mellon’s withholding of certain documents based
on the attorney-client privilege and/or the work product doctrine. (See
generally Dkt. #105, 107, 110, 120, 121, 123; see also Dkt. #117 (transcript of
hearing of July 15, 2019), 125 (transcript of hearing of August 8, 2019)). To
aid in resolving these disputes, the Court undertook an in camera review of 12
categories of documents catalogued on Defendant’s privilege log (Dkt. #110-1),
comprising 154 documents, along with 35 additional documents that were
provided to the Court for context (see Dkt. #123 at 1 n.1). As detailed in the
remainder of this Order, the Court largely agrees with Defendant’s
designations.
OVERVIEW
The Court begins by extending its deepest appreciation to the parties for
their flexibility, if not their indulgence, in this process. The Court’s efforts to
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begin this review were stymied, first by a series of applications for immediate
injunctive relief and then by the upending of the Court’s docket occasioned by
the COVID-19 pandemic. The Court thanks the parties for allowing it to
prioritize criminal cases — and, in particular, applications for compassionate
release — before attending to the time-intensive task of the in camera review.
In preparation for this review, the Court reviewed each of the docket
entries identified above. Included among this information were several sworn
statements from individuals involved with Project LDC (see Dkt. #105-3, 1054), and representations of counsel made at the July 15 and August 8 hearings.
The Court then reviewed each of the categories of documents that were
submitted in camera.
To aid the Court’s analysis, the parties provided primers on the legal
issues implicated by Defendant’s withholding of these documents. (See, e.g.,
Dkt. #107, 121, 123). Both sides accurately state the law, albeit with differing
degrees of specificity and relevance. Significantly, however, the Court’s review
confirms that Defendant’s assertions of the attorney-client privilege and the
work product doctrine are, in the main, proper. More to the point, with a few
exceptions discussed later in this Order, Defendant has not sought to
transmute business documents (or other non-privileged materials) into
privileged or protected documents by the mere addition of an attorney into the
mix. To the contrary, the documents reviewed by the Court make clear that
information was gathered, and materials were prepared, at the direction of
counsel for the specific provision of legal advice.
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APPLICABLE LAW
In a case brought under a federal statute — here, the Trust Indenture
Act — the federal common law of attorney-client privilege applies. See Wultz v.
Bank of China Ltd., 304 F.R.D. 384, 390 (S.D.N.Y. 2015); accord In re Copper
Mkt. Antitrust Litig., 200 F.R.D. 213, 217 (S.D.N.Y. 2001) (“Where, as here,
subject matter jurisdiction is based on a federal question, privilege issues are
governed by federal common law.” (citation omitted)). The attorney-client
privilege “protects communications [i] between a client and his or her attorney
[ii] that are intended to be, and in fact were, kept confidential [iii] for the
purpose of obtaining or providing legal advice.” United States v. Mejia, 655
F.3d 126, 132 (2d Cir. 2011). As a sister court in this District has ably
summarized:
The attorney-client privilege protects from disclosure
“[i] a communication between client and counsel that
[ii] was intended to be and was in fact kept confidential,
and [iii] was made for the purpose of obtaining or
providing legal advice.” In re County of Erie, 473 F.3d
413, 419 (2d Cir. 2007); accord American Civil Liberties
Union v. United States Department of Justice, 210 F.
Supp. 3d 467, 477 (S.D.N.Y. 2016); United States v.
Ghavami, 882 F. Supp. 2d 532, 536 (S.D.N.Y. 2012).
Obtaining or providing legal advice need not be the sole
purpose of the communication; rather, the touchstone
is “whether the predominant purpose of the
communication is to render or solicit legal advice.” In
re County of Erie, 473 F.3d at 420; accord United States
v. Mount Sinai Hospital, 185 F. Supp. 3d 383, 389
(S.D.N.Y. 2016). The privilege protects both the
advice of the attorney to the client and the
information communicated by the client that
provides a basis for giving advice. See Upjohn Co. v.
United States, 449 U.S. 383, 390 (1981); In re Six Grand
Jury Witnesses, 979 F.2d 939, 943-44 (2d Cir. 1992); In
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re General Motors LLC Ignition Switch Litigation (“In re
GM”), 80 F. Supp. 3d 521, 527 (S.D.N.Y. 2015); ChenOster v. Goldman, Sachs & Co., 293 F.R.D. 547, 554
(S.D.N.Y. 2013). “[T]he burden is on a party claiming the
protection of a privilege to establish those facts that are
the essential elements of the privileged relationship.” In
re Grand Jury Subpoena Dated Jan. 4, 1984, 750 F.2d
223, 224 (2d Cir. 1984); accord In re Grand Jury
Subpoena Dated July 6, 2005, 510 F.3d 180, 184 (2d
Cir. 2007); Mount Sinai, 185 F. Supp. 3d at 391;
Ghavami, 882 F. Supp. 2d at 536.
Johnson v. J. Walter Thompson U.S.A., LLC, No. 16 Civ. 1805 (JPO) (JCF), 2017
WL 3432301, at *2 (S.D.N.Y. Aug. 9, 2017) (emphasis added).
As to a small subset of the documents, Defendant also asserts the work
product doctrine. “Federal law governs the applicability of the work product
doctrine in all actions in federal court.” Wultz, 304 F.R.D. at 393 (citing Allied
Irish Banks, P.L.C. v. Bank of Am., N.A., 252 F.R.D. 163, 173 (S.D.N.Y. 2008)).
Federal Rule of Civil Procedure 26(b)(3) codifies the doctrine in part, providing
that “a party may not discover documents and tangible things that are
prepared in anticipation of litigation or for trial by or for another party or its
representative (including the other party’s attorney, consultant, surety,
indemnitor, insurer, or agent),” unless “the party shows that it has substantial
need for the materials to prepare its case and cannot, without undue hardship,
obtain their substantial equivalent by other means.”
The work product doctrine is designed “to preserve a zone of privacy in
which a lawyer can prepare and develop legal theories and strategy ‘with an eye
toward litigation,’ free from unnecessary intrusion by his adversaries.” United
States v. Adlman, 134 F.3d 1194, 1196 (2d Cir. 1998) (quoting Hickman v.
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Taylor, 329 U.S. 495, 510-11 (1947)); accord United States v. Nobles, 422 U.S.
225, 238-39 (1975). The party asserting work product protection must
demonstrate that the material at issue “[i] [is] a document or a tangible thing,
[ii] that was prepared in anticipation of litigation, and [iii] was prepared by or
for a party, or by his representative.” Allied Irish Banks, 252 F.R.D. at 173
(internal quotation marks and citation omitted).
THE COURT’S REVIEW OF PRIVILEGE LOG CATEGORIES
Category 6:
Documents created at the request of BNYM’s in-house
and/or outside counsel reflecting legal advice of BNYM’s
in-house and/or outside counsel in connection with
tracking and responding to legal questions from
Corporate Trust Department.
The Court reviewed the two documents in this category, contained at
Tabs 72 and 73, 1 which were withheld based on a claim of attorney-client
privilege. Each document is a chart of information; each is prefaced by another
document, withheld from production on a different basis, that makes plain that
each chart was prepared at the request of counsel in the course of seeking or
rendering legal advice. The privilege claims are upheld.
Category 21:
Document and communication between BNYM
employees created at the request of BNYM’s in-house
and/or outside counsel regarding BNYM’s role and duties
as trustee in connection with loan modification.
The Court reviewed the four documents in this category, all contained at
Tab 53, which were withheld based on a claim of attorney-client privilege. The
four documents consist of one email and three Excel spreadsheets. The Court
1
The Tabs referenced in this Order correspond to the binder of hard copies that was
provided to the Court for the purposes of its in camera review.
5
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understands from the email and from prior submissions of Defendant that the
information contained in the three Excel spreadsheets was gathered to assist
in-house and outside counsel in providing legal advice concerning RMBS
issues. The privilege claims as to the four documents are therefore upheld.
See generally Pearlstein v. BlackBerry Ltd., No. 13 Civ. 7060 (CM) (KHP), 2019
WL 1259382, at *15 (S.D.N.Y. Mar. 19, 2019) (“Although it is true that a fact
investigation conducted at the direction of an attorney for purposes of
rendering legal advice is protected by the attorney-client privilege, First Chicago
Int’l v. United Exch. Co., 125 F.R.D. 55, 56-58 (S.D.N.Y. 1989), the purpose of
the fact investigation must be to aid the provision of legal advice.”); In re
Rivastigmine Patent Litig., 237 F.R.D. 69, 80 (S.D.N.Y. 2006) (“Communications
among non-attorneys in a corporation may be privileged if made at the
direction of counsel, to gather information to aid counsel in providing legal
services.” (citations omitted)), abrogated on other grounds by In re Queen’s Univ.
at Kingston, 820 F.3d 1287 (Fed. Cir. 2016).
Category 24:
Documents created by BNYM employees at the request of
BNYM’s in-house and/or outside counsel regarding
BNYM’s role and duties as trustee in connection with
investor/insurer inquiries.
The Court reviewed the three documents in this category, contained at
Tabs 15 and 16, which were withheld based on a claim of attorney-client
privilege. These documents are prefaced by other documents, withheld from
production on other bases but included here for context, that make clear that
the documents in this category were created at the request of counsel in the
course of seeking and rendering legal advice. The privilege claims are upheld.
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Category 35:
Document reflecting legal advice of BNYM’s in-house
and/or outside counsel regarding BNYM’s role and duties
as trustee in connection with potential bank exposure.
The Court reviewed the one document in this category, contained at
Tab 57, which was withheld based on a claim of attorney-client privilege. The
document in question, an Excel spreadsheet, is prefaced by a document,
withheld from production on other bases but included here for context, that
makes clear that the information contained in the spreadsheet was gathered in
order to seek legal advice from outside counsel. The privilege claim is upheld.
Category 42:
Communication between BNYM employees, including
BNYM’s in-house counsel, reflecting legal advice of
BNYM’s in-house and/or outside counsel regarding
BNYM’s role and duties as trustee in connection with
government requests for information and in connection
with Project LDC, a project undertaken at the direction
of BNYM in-house counsel, Robert Bailey, regarding
remediation of Corporate Trust Accounts.
The Court reviewed the one document in this category, contained at
Tab 51, which was withheld based on a claim of attorney-client privilege. The
document in question, an Excel spreadsheet, is prefaced by a document,
withheld on other bases but included here for context, that makes clear that
the information contained in the spreadsheet was gathered in the course of
seeking and rendering legal advice from in-house counsel. The privilege claim
is upheld.
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Category 43:
Communications between BNYM employees, including
BNYM’s in-house counsel, reflecting legal advice of
BNYM’s in-house and/or outside counsel regarding
BNYM’s role and duties as trustee in connection with
internal policies and procedures.
The Court reviewed the three documents in this category, contained at
Tabs 1, 2, and 76, which were withheld based on a claim of attorney-client
privilege. With respect to the documents at Tabs 1 and 2, the Court does not
believe that they are privileged documents, and orders their disclosure. As for
the document at Tab 76, the Court does not believe it is subject to the
attorney-client privilege, but is concerned that it lacks sufficient information to
make a final determination. Defendant is directed either to disclose the
document within 30 days, or to submit within 30 days a supplemental in
camera submission explaining why the privilege attaches.
Category 55:
Documents and communications between BNYM
employees, including in-house counsel, BNYM’s outside
counsel, and third-parties hired by BNYM in-house
and/or outside counsel regarding repurchase requests
and other inquiries from investors, insurers, deal parties
or other entities and responses to such requests or
inquiries.
The Court reviewed the 27 documents in this category, contained at
Tabs 11, 12, 13, 14, 17, 18, 19, 54, 55, 56, 58, 60, 63, 64, 65, 66, 67, 69, 70,
71, 74, 75, 77, and 78, 2 which were withheld based on claims of the attorneyclient privilege and the work product doctrine. To begin, the materials
included at Tabs 11, 12, 13, 14, 17, 18, 19, 60, 63, 64, 65, 66, 69, 70, 71, 74,
75, 77, and 78 comprise communications directly with in-house and outside
2
At times, multiple documents were located at a single Tab.
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counsel in the course of seeking and rendering legal advice, and are plainly
privileged. By contrast, the documents at Tabs 54, 55, 56, 58, and 67 are not
subject to the attorney-client privilege, and should be disclosed. Separately,
the Court believes that the documents in this category that it has found to be
subject to the attorney-client privilege are also likely to be protected under the
work product doctrine, although if Defendant seeks to press this point, the
Court would require supplemental information regarding the doctrine’s “in
anticipation of litigation” requirement.
Category 57:
Documents and communications between BNYM
employees and third-parties hired by BNYM in-house
and/or outside counsel created at the request of BNYM
in-house counsel regarding repurchase requests and
other inquiries from investors, insurers, deal parties or
other entities and responses to such requests or
inquiries.
The Court reviewed the four documents in this category, contained at
Tabs 19, 68, 70, and 71, which were withheld based on claims of the attorneyclient privilege and the work product doctrine. The Excel spreadsheet at
Tab 19 is prefaced by another document, withheld as part of Category 55,
which confirms that the spreadsheet was prepared at the direction of counsel
in the course of seeking or rendering legal advice. The documents contained at
Tabs 68, 70, and 71 constitute communications directly with in-house and
outside counsel in the course of seeking and rendering legal advice, and are
privileged. Using an analysis similar to that identified in the preceding section,
the Court is inclined to believe that these materials are also subject to the work
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product doctrine, although it would require additional information to make a
final determination.
Category 75:
Documents and communications between BNYM
employees, BNYM’s outside counsel, and third-parties
hired by BNYM in-house and/or outside counsel created
at the request of BNYM’s in-house and/or outside
counsel regarding document custody in connection with
Project LDC, a project undertaken at the direction of
BNYM in-house counsel, Robert Bailey, regarding
remediation of Corporate Trust Accounts.
The Court reviewed the 84 documents in this category, contained at
Tabs 3, 4, 5, 6, 7, 8, 9, 10, 21, 23, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36, 37,
38, 39, 40, 41, 45, 61, and 62, 3 which were withheld based on claims of the
attorney-client privilege and the work product doctrine. The documents at
Tabs 3, 4, 5, 6, 7, 30, 32, 33, 34, 35, 36, 37, 38, 40, and 45 reflect
communications internally within Defendant, and with outside entities hired at
the direction of in-house counsel, undertaken in an effort to prepare or to
gather materials for in-house and outside counsel in connection with the
provision of legal advice, as distinguished from business advice, and they are
therefore privileged. That said, certain of the communications within certain
email strings do not appear to this Court to be privileged, although they may
also not be responsive to any of Plaintiffs’ discovery demands. They include
(i) the carryover email timed at 4:33 p.m. on BNYMDOC0007; (ii) the email
timed at 12:59 p.m. on BNYMDOC0009; (iii) the email timed at 11:41 a.m. on
3
At times, multiple documents were located at a single Tab.
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BNYMDOC0013. As to these communications, Defendant’s counsel should
either produce them in redacted form or explain their irrelevance.
The documents at Tabs 8, 9, 10, 21, and 23 are prefaced by other
documents, withheld on different bases but included for context, that make
clear that the specific information contained the challenged documents was
either prepared or gathered at the direction of counsel in connection with the
seeking and rendering of legal advice, and they are therefore privileged.
The documents at Tabs 26, 27, 28, 29, 39, and 41 involve
communications directly with in-house and/or outside counsel in the course of
seeking and rendering legal advice, and are privileged. Using an analysis
similar to that identified above, the Court is inclined to believe that those
materials that it has found to be privileged are also subject to the work product
doctrine, although it would require additional information.
Finally, as to the documents at Tabs 61 and 62, the Court does not have
sufficient information to make a final privilege determination. Defendant is
directed either to disclose the documents within 30 days, or to submit within
30 days a supplemental in camera submission explaining why the privilege
attaches to each.
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Category 77:
Documents and communications between BNYM
employees, BNYM’s outside counsel, and third parties
hired by BNYM in-house and/or outside counsel
reflecting legal advice of BNYM’s in-house and/or outside
counsel regarding document custody in connection with
Project LDC, a project undertaken at the direction of
BNYM in-house counsel, Robert Bailey, regarding
remediation of Corporate Trust Accounts.
The Court reviewed the 22 documents in this category, contained at Tabs
20, 24, 25, 31, 42, 43, 44, 46, 47, 48, 49, 50, and 52, 4 which were withheld
based on claims of attorney-client privilege. The documents at Tabs 24, 42, 43,
44, 46, 47, 48, 49, and 50 reflect communications internally within Defendant,
and with outside entities hired at the direction of in-house counsel, that were
undertaken in an effort to prepare or gather materials for in-house and outside
counsel in connection with the provision of legal advice, as distinguished from
business advice, and they are therefore privileged.
The documents at Tab 20 are prefaced by other documents, withheld on
other bases but included here for context, that make clear that the information
contained at this Tab was either prepared or gathered at the direction of
counsel in connection with the seeking and rendering of legal advice, and these
documents are also privileged.
The documents at Tabs 25, 31, and 52 involve communications directly
with in-house and/or outside counsel in the course of seeking and rendering
legal advice, and for this reason they are all privileged.
4
At times, multiple documents were located at a single Tab.
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Using an analysis similar to that identified above, the Court is inclined to
believe that those materials it has found to be privileged are also subject to the
work product doctrine, although it requires additional information.
Category 80:
Communication between BNYM employees created at the
request of BNYM’s in-house and/or outside counsel
reflecting legal advice of BNYM’s in-house and/or outside
counsel regarding document custody in connection with
Art. 77 proceedings.
The Court reviewed the one document in this category, contained at
Tab 22, that was withheld based on a claim of attorney-client privilege.
Included with the document for context is another withheld document that
makes clear that the email in question was in internal communication
undertaken in an effort to gather and prepare materials for in-house and
outside counsel in connection with the seeking or rendering of legal advice. It
is therefore privileged. 5
CONCLUSION
The Court upholds the claim of attorney-client privilege as to the entries
described above. For those entries as to which the Court rejected the claim of
privilege outright, Defendant is directed to produce the documents within 30
days of the date of this Order. For those entries as to which the Court
permitted supplemental briefing, Defendant is to submit such briefing within
30 days of this Order.
5
The Court does not address the documents in Category 95, which were withheld
pursuant to the bank examination privilege, in light of subsequent developments in the
record. (See Dkt. #123, 124, 127, 128, 129).
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SO ORDERED.
Dated:
November 23, 2020
New York, New York
__________________________________
KATHERINE POLK FAILLA
United States District Judge
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