Opinion
Action under the Securities Act. On plaintiff's motion to require defendant to answer interrogatories, the District Court, Sugarman, J., held that scope of interrogatories, inquiring generally into ‘ participation’, and scope of privilege asserted in answers encompassing ‘ details', made it utterly impossible for court to determine issue on scant information before it on motion to compel defendant to answer interrogatories, and that motion would be denied, but without prejudice to matter being further explored upon deposition by oral examination of defendant.
Order accordingly.
Arthur, Dry & Dole, New York City, for plaintiff, Walter Barthold, New York City, of counsel.
I. Saul Fleischman, New York City, for defendant Sidney B. Josephson.
SUGARMAN, District Judge.
In an action under the Securities Act of 1933, 15 U.S.C.A. § 77a et seq., the plaintiff propounded interrogatories to one of the defendants, Sidney B. Josephson, an attorney.
The said defendant refused complete answers to interrogatories 9, 10, 11, 12, 15, 16, 26 and 27 on the ground that ‘ details thereof are deemed to be confidential and a revelation of the same would be a violation of the Code of Ethics.' Thereupon the plaintiff moved ‘ for an order pursuant to Rule 37(a) of the Federal Rules of Civil Procedure [28 U.S.C.A.] compelling defendant’ to answer the said interrogatories and two others hereinafter considered. Although it does not appear that the attorney-client privilege is asserted by the client, who might or might not be a co-defendant herein for aught the papers show, the attorney properly asserts the privilege.
The said interrogatories and the answers thereto are:
Schwimmer v. United States, 8 Cir., 1956, 232 F.2d 855, 863, certiorari denied 1956, 352 U.S. 833, 77 S.Ct. 48, 1 L.Ed.2d 52.
It is assumed that the ‘ Code of Ethics' refered to in the answers to the interrogatories, is intended to cover the common-law privilege against disclosure of confidential communications between attorney and client said to be:— where legal advice of any kind is sought from a professional legal advisor in his capacity as such, the communications relevant to that purpose, made in confidence by the client, are at his instance permanently protected from disclosure by himself or by the legal advisor except the protection be waived.
VIII Wigmore on Evidence §§ 2294, 2300, 2306, 2311, 2317, 2321, 2324 and 2327. Cf. F.R.Civ.P. 43(a) and New York Civil Practice Act § 353.
The privilege generally attaches to communications only and should not be extended except in unusual cases.
McCormick on Evidence 186.
The question of whether matter into which inquiry is sought is ‘ privileged’ is for the court to decide, not the witness. However, the scope of these interrogatories, inquiring generally into ‘ participation,’ and the scope of the asserted privilege in the answers encompassing ‘ details' makes it utterly impossible for the court to determine the issue on the scant information before it on this motion.
Robinson v. United States, 6 Cir., 1944, 144 F.2d 392, 404; People's Bank of Buffalo v. Brown, 3 Cir., 1902, 112 F. 652, 654, 655.
Obviously, further interrogatories would be a clumsy device to attempt to elicit the information prerequisite to an intelligent determination of whether Mr. Josephson need divulge the information he seeks to suppress.
Cf. 4 Moore's Fed.Prac. (2d ed.) 1958 Cum.Supp. pp. 54-56.
The instant motion in so far as it is addressed to the answers to interrogatories 9, 10, 11, 12, 15, 16, 26 and 27 is denied without prejudice to the plaintiff's noticing the deposition upon oral examination of Mr. Josephson. If the witness then asserts the privilege as to specific inquiries, the judge in the motion part can better pass upon the propriety of the question and the refusal to answer. Another interrogatory seeks the whereabouts of a person with whom Mr. Josephson dealt. The answer is silent as to that inquiry. However, in the affidavit of Mr. Josephson in opposition to this motion he states that he is unable to completely answer interrogatory 7 because he does not know the residence or business address of Samuel P. Lewis except for the address of Mr. Lewis' employer, the defendant Stratford Securities Co. Answer 7 is deemed expanded to include this further statement. Accordingly, the motion is denied as to interrogatory 7.
Finally, it is urged that interrogatory 23 was not fully answered. On the papers before me I cannot determine whether the answer is, as claimed, ‘ not responsive.’ Hence the motion is denied without prejudice to the matter being further explored upon the deposition by oral examination of Mr. Josephson should plaintiff notice same as above suggested.
This decision is the order; no further order is necessary.
Interrogatory
Answer
‘ 9. State whether you have everparticipated in any way (personally, by agent, orotherwise) in or have given any instructions withrespect to any reorganization into its present capitalstructure or any prior reorganization orrecapitalization of defendant General Oil or anypredecessor corporation, and, if you have, set forththe full details of your participation in or yourinstructions with respect to each such reorganizationor recapitalization and the name and last-knownresidence and business address of each person who inany way participated with you in each suchreorganization or recapitalization or to whom you gaveany instructions with respect thereto.’
‘ I have never participated inany way personally by agent or otherwise or given anyinstructions with respect to any reorganization intoits present capital structure or any priorreorganization or recapitalization of defendant GeneralOil or any predecessor corporation except as anattorney in which respect details thereof are deemed tobe confidential and a revelation of the same would be aviolation of the Code of Ethics.’
‘ 10. State whether you haveever participated in any way (personally, by agent, orotherwise) in or have ever given any instructions withrespect to any changes of name made by defendantGENERAL OIL or any predecessor corporation, and, if youhave, set forth the full details of your participationin or your instructions with respect to each suchchange of name and the name and last-known residenceand business address of each person who in any wayparticipated with you in each such change of name or towhom you gave any instructions with respectthereto.’
‘ I have never participated inany way, personally, by agent or otherwise in or havegiven any instructions with respect to any changes ofname made by defendant General Oil or any predecessorcorporation except as an attorney in which respectdetails thereof are deemed to be confidential and arevelation of the same would be a violation of the Codeof Ethics.’
‘ 11. State whether you haveever participated in any way (personally, by agent, orotherwise) in or have ever given any instructions withrespect to the selection of any person to serve as adirector or officer of defendant General Oil, and, ifyou have, set forth the full details of yourparticipation in or your instructions with respect toeach such selection and the name and last-knownresidence and business address of each person who inany way participated with you in each such selection orto whom you gave any instructions with respectthereto.’
‘ I have never participated inany way, personally, by agent or otherwise, in or haveever given any instructions with respect to theselection of any person to serve as a director orofficer of defendant General Oil except as an attorneyin which respect details thereof are deemed to beconfidential and a revelation of the same would be aviolation of the Code of Ethics.’
‘ 12. State whether you haveever participated in any way (personally, by agent, orotherwise) in or have ever given any instructions withrespect to the conduct or management of the businessoperations of defendant General Oil, including but notlimited to (a.) the acquisition or disposition of anyreal or personal property, including leaseholds, gas,oil or mineral rights or options thereon, (b.) thekeeping of books or records of any kind, (c.) thehiring or discharge of any employees or other agents,(d.) the filing of reports with or the answering ofinquiries from governmental agencies, (e.) the sendingof form letters or other communications tostockholders, (f.) the retaining of legal counsel toadvise in the operations of the business, (g.) theauthorization, issuance, sale or purchase of securitiessuch as stock, bonds, debentures, rights or warrants,or (h.) advertising, publicity or public relations. Ifyou have, set forth the full details of each instanceof your participation in or your instructions withrespect to the management or conduct of such operationsand the name and last-known residence and businessaddress of each person who participated in any way withyou in the conduct or management of such operations orto whom you gave any instructions with respectthereto.’
‘ I have never participated inany way personally or otherwise in or have ever givenany instructions with respect to the conduct ormanagement of the business operations of defendantGeneral Oil including but not limited to any of theitems set forth in interrogatory 12, except as anattorney in which respect details thereof are deemed tobe confidential and a revelation of the same would be aviolation of the Code of Ethics.’
‘ 15. State whether youparticipated in any way (personally, by agent, orotherwise) in or gave any instructions with respect tothe selection, appointment or removal of defendantJames A. Carney or any other person, firm orcorporation as the transfer agent for the common stockof defendant General Oil and, if you did, set forth thefull details of your participation in or yourinstructions with respect to each such selection,appointment or removal and the name and last-knownresidence and business address of each person who inany way participated with you in each such selection,appointment or removal or to whom you gave anyinstruction with respect thereto.’
‘ I have never participated inany way personally, by agent or otherwise in or gaveany instructions with respect to the selection,appointment or removal of defendant James A. Carney orany other person, firm or corporation as the transferagent for the common stock of defendant General Oilexcept as an attorney in which respect details thereofare deemed to be confidential and a revelation of thesame would be a violation of the Code ofEthics.’
‘ 16. State whether you haveever participated in any way (personally, by agent, orotherwise) in or have ever given instructions withrespect to the mailing, delivering or otherwiseforwarding of certificates of the common stock ofdefendant General Oil to the transfer agent for thecommon stock of said defendant, and, if you have, setforth the full details of your participation in or yourinstructions with respect to such mailing, delivery orforwarding and the name and last-known residence andbusiness address of each person who participated withyou in each such mailing, delivery or forwarding or towhom you gave any instructions with respectthereto.’
‘ I have never participated inany way personally, by agent or otherwise in or haveever given instructions with respect to the mailing,delivery or otherwise forwarding of certificates of thecommon stock of the defendant General Oil to thetransfer agent for the common stock of said defendantexcept as an attorney in which respect details thereofare deemed to be confidential and a revelation of thesame would be a violation of the Code ofEthics.’
‘ 26. Whatever you answer tointerrogatory No. 25, above, state whether to yourknowledge J. & S. Associates, Inc. (under that or anyother name) ever engaged in any transaction of any kindwith defendant General Oil, defendant Stratford, or,defendant Charles E. Graham, Jr., and, if it did, setforth the full details of each such transaction,including the name and last-known residence andbusiness address of each person who participated ineach such transaction (whether as principal, as agent,or otherwise) a full description of any property, realor personal, tangible or intangible, comprising thesubject matter of or otherwise involved in any way ineach such transaction, and the date of all contracts,agreements, options, deeds, letters, checks, promissorynotes and other written instruments of any kind havinganything to do with each such transaction. State as toeach such written instrument whether a copy thereof isin your possession, and, if it is not, set forth thename and last-known residence and business address ofany believed by you to have a copy of such writteninstrument.’
‘ J. & S Associates, Inc.,engaged in some transactions with General Oil anddefendant Charles E. Graham, Jr., but not withdefendant Stratford, to my knowledge. I participated inthe transactions referred to herein as attorney for J &S and General and as an attorney deem these details tobe confidential and a revelation of the same would be aviolation of the Code of Ethics.’
‘ 27. Except as specifically setforth in your answers to previous interrogatories,state whether you have presently in your possessionrecords of any of the transactions or occurrencesreferred to in your answers to any of the previousinterrogatories (including, for example, records of anytrips to Montreal, letters to or from other defendantsto this action, ledgers or other books of account,cancelled checks, books of check stubs, bank statementsor credit or debit memoranda), and, if you have, setforth a brief description of each category orclassification of such records and the transaction towhich each such category or classificationrelates.’
‘ Whatever records are presentlyin my possession are in possession as an attorney andare deemed confidential and a revelation of the samewould be a violation of the Code ofEthics.’
Interrogatory
Answer
‘ 7. Set forth the date on whichyou first learned that defendant Stratford was sellingor intended to sell the common stock of defendantGeneral Oil & Industries, Inc. (hereinafter referred toas ‘ defendant General Oil’ ) to the publicand the name and last-known residence and businessaddress of the person or persons from whom you learnedit.'
‘ Sometime in July, 1958, Ifirst learned that the defendant Stratford intended totrade in the common stock of General Oil & Industries,Inc. I learned this from defendant Samuel P.Lewis.’
‘ 23. State whether you haveever had dealings of any kind in any capacity withArmand Savageau of T. F. Hogg & Co. (formerly known asA. E. Mack & Co., Ltd.) of Montreal, Canada, or withany other person, firm or corporation, regarding thesale of common stock of defendant General Oil toplaintiff, and, if you have, state in detail what thosedealings were and set forth the name and last-knownresidence and business address of each person whoparticipated with you in any suchdealings.’
‘ As attorney and in companywith William Sigler of 1405 Bishop Street, Montreal,Quebec, Canada, I met Mr. Armand Savageau of A. E. Mack& Co. Ltd., of Montreal, Canada who questioned me aboutthe necessity for registering the common stock ofGeneral Oil at which time I advised him that in myopinion the shares of General Oil were exempt fromregistration requirements of the Security Act of 1933pursuant to Section 3(a)(1) of the Securities Act [15U.S.C.A. § 77c(a)(1)].’