Holmes et al v. City of Racine et al

Filing 134

ORDER signed by Judge J P Stadtmueller on 3/17/15: denying 128 Defendants' Motion to Compel; and granting 127 Defendant's Motion for Leave to File Excess Pages. See Order. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
THOMAS J. HOLMES, d/b/a Park 6 Bar, LLC,
OTHA KEITH FAIR, d/b/a The Place on 6th LLC,
JOSE MALDONADO, d/b/a The Cruise Inn,
MARIA E. MALDONADO, d/b/a The Cruise Inn,
WILBUR JONES, d/b/a Viper’s Lounge,
PYTHAPHONE KHAMPANE,
d/b/a Ginger’s Lounge, and
OMJAI NUEAKEAW, d/b/a Ginger’s Lounge,

Plaintiffs,

Case No. 14-CV-208-JPS

v.
CITY OF RACINE, GARY BECKER,
JOHN DICKERT, KURT S. WAHLEN,
JAMES KAPLAN, GREGORY T. HELDING,
DAVID L. MAACK, ARON WISNESKI,
ROBERT MOZOL, MARK L. LEVINE,
JOSEPH G. LEGATH,
DOUGLAS E. NICHOLSON, and
GREGORY S. BACH,

ORDER

Defendants.
On March 2, 2015, the defendants filed an expedited motion to compel
discovery. (Docket #128). They request production of various emails between
plaintiffs’ counsel and James Spodick. (Docket #128). The plaintiffs refuse to
produce those emails, asserting: (1) that 119 of them are privileged pursuant
to an attorney-client relationship between counsel and Mr. Spodick; and
(2) that 75 of the documents sent from Mr. Spodick to counsel contain work
product, as Mr. Spodick is an investigator.
Mr. Spodick has two separate relations to this case. First, he owned
property in Racine, which he rented to two of the plaintiffs. (Docket #139, Ex.
1, ¶ 2). On this basis, Mr. Spodick asserts that he considered participating in
this case as a plaintiff and signed a retention agreement with the plaintiff’s
counsel. (Docket #139, Ex. 1, ¶¶ 5–7). Mr. Spodick also allegedly serves as an

investigator for the plaintiffs and has produced a documentary film, which
contains interviews with many of the plaintiffs.
Previously, in Solis v. Milk Specialties Co., the Court provided a detailed
summary of the law relating to both attorney-client privilege and work
product:
The attorney-client privilege protects communications
“[w]here legal advice of any kind is sought” from a lawyer.
United States v. Evans, 113 F.3d 1457, 1461 (7th Cir. 1997).
Where the communications are made in confidence by the
client for that purpose, they are permanently protected except
where the privilege is waived. Id. By the same token, the
privilege protects only communications, not the underlying
facts. Upjohn Co. v. United States, 449 U.S. 383, 395 (1981). The
party invoking the privilege bears the burden of establishing
its existence, and the scope of the privilege is narrowly
construed. United States v. White, 950 F.2d 426, 430 (7th Cir.
1991).…where the purpose of the communications is to secure
business advice, rather than legal advice, the attorney-client
privilege does not apply. See Burden–Meeks v. Welch, 319 F.3d
897, 899 (7th Cir. 2003) (privilege covers legal subjects, and
“hard to see why a business evaluation meets that
description”); see also, e.g., Sandra T.E. v. S. Berwyn Sch. Dist.,
600 F.3d 612, 620 (7th Cir. 2010) (citing Burden–Meeks for the
proposition); In re Sealed Case, 737 F.2d 94, 99 (D.C. Cir. 1984)
(privilege applies only upon showing advice given in legal
capacity).
As to the work product doctrine, a party need not disclose
materials prepared “in anticipation of litigation,” including
both opinion work product and ordinary or fact work product.
Fed.R.Civ.P. 26(b)(3)(A); Caremark, Inc. v. Affiliated Computer
Servs., Inc., 195 F.R.D. 610, 616 (N.D. Ill. 2000); see also, e.g.,
United States v. Nobles, 422 U.S. 225, 237–38 (1975). The
protection extends to materials prepared for the attorney by
agents. Nobles, 422 U.S. at 238–39. The doctrine is intended to
protect attorney thought process and mental impressions, as
well as “to limit the circumstances in which attorneys may
piggyback on the fact-finding investigation of their more
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diligent counterparts.” Sandra T.E., 600 F.3d at 622. Again, the
burden of establishing the privilege rests on the party invoking
it. Caremark, 195 F.R.D. at 616. The “in anticipation” standard
means that the materials “can fairly be said to have been
prepared or obtained because of the prospect of litigation.”
Logan v. Commercial Union Ins. Co., 96 F.3d 971, 976–77 (7th
Cir.1996) (emphasis in original). The Seventh Circuit further
elaborated that the standard requires distinguishing between
materials prepared in the ordinary course of business “as a
precaution for the remote aspect of litigation” and those
prepared “because some articulable claim, likely to lead to
litigation… ha[s] arisen.” Id. at 977 (emphasis and alteration in
original). Despite protection, a party may still force disclosure
if it establishes “substantial need” for the material and the
inability to obtain the equivalent without “undue hardship.”
Fed.R.Civ.P. 26(b)(3)(A)(ii).
Solis, 854 F. Supp. 2d 629, 631–32 (E.D. Wis. 2012).
It is difficult to apply those principles to the limited record before the
Court. But, doing so, it appears that the plaintiffs have met their burden to
establish both attorney-client privilege and work product.
As to attorney-client privilege, it seems clear that Mr. Spodick entered
into an attorney-client relationship with the plaintiffs’ counsel, and that the
attorney-client relationship remains ongoing. The mere fact that Mr. Spodick
does not have any current claims in this lawsuit is irrelevant. His businesses
were affected by the defendants’ alleged actions, so it was rational that he
would consider joining this lawsuit and retain the attorneys in charge of the
lawsuit. Moreover, his potential claims remain hypothetically viable, as he
may have suffered damage as a result of the defendants’ alleged RICO
activity. Finally, there is no indication that he has ever terminated his
attorney-client relationship with the plaintiffs’ counsel. Both his declaration
and the declaration of one of his attorneys supports his contention that the
relationship is ongoing. (Docket #130, Exs. 1, 2). With that said, the Court
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notes that any recent or ongoing communications between the plaintiffs’
counsel and Mr. Spodick may be very unlikely to contain privileged
information. With the time for amendment of pleadings now passed, it
appears exceedingly unlikely that Mr. Spodick will be joining this case as a
party; and, given that his retention of the plaintiffs’ counsel was for the
limited purpose of a civil action against the City of Racine, the likelihood that
any emails would contain privileged information about that representation
is very low. The plaintiffs’ privilege claims are on very thin ice. The Court
urges them to seriously consider any claims of attorney-client privilege going
forward. Finally, the defendants contend that the plaintiffs’ attorneys’ action
is not consistent with an attorney-client relationship, because the plaintiffs’
attorneys plan to take Spodick’s deposition in this case. (Docket #128, at 5).1
There is nothing inherently inappropriate with this approach, and it certainly
does not satisfy the Court that the attorney-client relationship has been
terminated. For these reasons, the Court finds that the plaintiffs have
satisfied their burden to show the existence of attorney-client privilege and
the Court will reject the defendants’ motion to compel in that regard.
The plaintiffs have also carried their burden as to work product.
Plaintiffs’ counsel’s declaration in that regard asserts that “Mr. Spodick also
serves as an investigator and agent for our firms with respect to the abovecaptioned matter. As an investigator and agent, Mr. Spodick generated
documents in anticipation of litigation. In responding to Municipal
Defendants’ document requests, we withheld such documents pursuant to
the work product doctrine. We distinguished between documents Mr.

1

The plaintiffs reiterate this argument in a letter filed in reply to the
defendants’ response. The Court will ignore that letter for failure to comply with
Civil L.R. 7(h).

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Spodick generated to support his documentary and documents Mr. Spodick
generated in anticipation of litigation and only withheld the latter.” (Docket
#130, Ex. 2, ¶¶ 8–9). There is no reason to believe that the plaintiffs’ counsel
is lying about the fact that Mr. Spodick has acted as the plaintiffs’
investigatory agent. Moreover, the plaintiffs assert that they adequately
distinguished between information prepared for Mr. Spodick’s documentary
and work product prepared in anticipation of litigation, and only refused to
disclose the latter. Again, there is no reason to believe that the plaintiffs are
lying about this fact. Therefore, from the record before the Court, the Court
finds that the work product doctrine applies to Mr. Spodick’s materials and,
thus, must deny the defendants’ motion to compel in that regard.
Accordingly,
IT IS ORDERED that the defendants’ motion to compel discovery
(Docket #128) be and the same is hereby DENIED; and
IT IS FURTHER ORDERED that the defendants’ motion for leave to
file excess pages (Docket #127) be and the same is hereby GRANTED.
Dated at Milwaukee, Wisconsin, this 17th day of March, 2015.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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