Opinion
Civil Action 18-11273(MCA)(LDW)
02-28-2023
OCCIDENTAL CHEMICAL CORPORATION, Plaintiff, v. 21ST CENTURY FOX AMERICA, INC., et al., Defendants.
DECISION OF SPECIAL MASTER GRANTING IN PART AND DENYING IN PART SMALL PARTIES GROUP'S MOTION TO COMPEL PLAINTIFF'S COMPLIANCE WITH COURT ORDER ON REMAND
THOMAS P. SCRIVO SPECIAL MASTER
INTRODUCTION
This matter comes by way of an Order entered on March 10, 2022, by the Honorable Madeline Cox Arleo's (ECF 2005) (“Order on Remand”) remanding to the Special Master the Small Parties Group's (“SPG Defendants'”) Motion to Compel (ECF 1091) to determine the context of documents withheld as privileged from Plaintiff Occidental Chemical Corporation's (“OxyChem”) First and Fourth Privilege Logs.
Following the Order on Remand, SPG Defendants filed a Motion for Miscellaneous Relief (the “Motion”) seeking to compel discovery withheld as privileged from the same privilege logs, which OxyChem has opposed. SPG Defendants seek an order compelling OxyChem to produce documents: (1) identified in the privilege logs without an author, sender, recipient and a date; (2) identified on the privilege logs that are not privileged as a result of periods of adversity between OxyChem and Maxus Energy Corporation (“Maxus”) and Tierra Solutions, Inc. (“Tierra”); and (3) referred to as H-2, which consists of a 66-page group of documents, also known as the “VE Memo” (“VE Memo” or “H-2”). In opposition, OxyChem argues that: (1) the periods of adversity between OxyChem and Maxus and Tierra ceased before any of the documents were exchanged and OxyChem, Maxus and Tierra's interests were all aligned at all relevant times; and (2) to the extent that any privilege of H-2 was waived, H-2 was clawed back in accordance with Fed. R. Evid. 502(b).
SPG Defendants assert that it has not received a response to its November Motion (ECF No. 1898). The November Motion seeks identical relief as the Motion and the April 28, 2022 Motion for Reconsideration and Clarification, previously decided. For this reason, the decisions on the Motion and the April 28, 2022 Motion, are responsive to the November Motion.
SPG Defendants' first argument was separately addressed in the Special Master Decision of July 18, 2022 (ECF 2107).
For the reasons set forth herein, SPG Defendants' Motion is GRANTED IN PART and DENIED IN PART.
STATEMENT OF PERTINENT FACTS AND PROCEDURAL HISTORY
A. Procedural History
On August 10, 2020, SPG Defendants filed a Motion to Compel the production of four categories of documents withheld as privileged or protected in OxyChem's First and Fourth privilege logs. The categories of documents are:
On November 4, 2020, the Special Master issued an interim Order requiring OxyChem to produce a sampling of documents from its privilege logs for in camera review, including H-2.
On March 18, 2021, the Special Master granted in part and denied in part SPG Defendants' Motion to Compel, finding that OxyChem properly withheld H-2 (“March 2021 Decision”). The Special Master found that the documents reflected attorney work product.
On June 29, 2021, the Special Master issued a Final Decision and Order (“June 2021 Order”), pertaining to the Special Master's in camera review of a sampling of documents from Exhibits H-1 and H-4, holding that the joint-client privilege and the community-of-interest doctrine applied. However, not all documents contained in Exhibits H-1 and H-4 were, in fact, privileged. After a comprehensive in camera review of hundreds of documents contained in Exhibits H-1 and H-4, the Special Master determined that OxyChem's privilege logs and documents were lacking in certain respects.
On July 13, 2021, SPG Defendants appealed, inter alia, the conclusion that any privilege of the VE Memo has not been waived.
On November 15, 2021, SPG Defendants filed a Motion to Enforce the June 2021 Order, asserting that OxyChem had still not produced fully responsive logs and many entries failed to contain an author, sender, recipient and date (“November 2021 Motion to Enforce”).
On March 10, 2022, the Order on Remand was issued, which contained two pertinent instructions to the Special Master: (1) “to the extent documents were prepared by independent counsel and the community-of-interest or joint-client privilege does not apply, the Court remand[ed] to the Special Master to reconsider those documents and make specific findings,” and (2) “remand[ed] on this issue and instruct[ed] the Special Master to make further factual findings on the record regarding whether the documents at issue were clawed back in the Spill Act litigation and, if they were not, whether any privilege is deemed waived as to the documents.” See Order on Remand at 7 and 10.
On March 25, 2022, the parties met to see if they could agree on reasonable next steps in light of the Order on Remand.
On April 4, 2022, SPG Defendants filed the Motion. In addition, SPG Defendants sought briefing on the issues raised in the Order on Remand and suggested that the Special Master perform an additional in camera review.
On April 19, 2022, the Special Master issued a Decision and Order (“April 2022 Decision”) granting in part and denying in part SPG Defendants' November 2021 Motion to Enforce. The Special Master required OxyChem to produce undated work product as there was no evidence of a temporal relationship to anticipated litigation.
On April 20, 2022, the parties conferenced with the Special Master. SPG Defendants argued that there were times in which OxyChem and Maxus were adverse, and production of documents from times of adversity are necessary. OxyChem, in return, asserted that SPG Defendants have conceded that OxyChem established the community of interest and joint-client relationships, and no additional documents need to be produced.
On May 13, 2022, SPG Defendants submitted two briefs in further support of its arguments.
On the same day, OxyChem filed opposition to the Motion. SPG Defendants submitted a reply on May 27, 2022, and OxyChem opposed the reply on that same date.
B. The Claw Back of the VE Memo
In the 1980s, the Lower Passaic River and surrounding properties (the “Lower Passaic River Site”) became the subject of regulatory action by the New Jersey Department of Environmental Protection (the “NJDEP”) and the U.S. Environmental Protection Agency (the “EPA”). The NJDEP reported risks from mercury, copper, and other metals in Passaic River fish and the presence of polychlorinated biphenyls found in fish tissue. Executive Orders were issued regarding contamination detected at the Diamond Alkali Superfund Site, which includes the Lower Passaic River Site and 80-120 Lister Avenue in Newark, New Jersey (the “Lister Site”). In 1984, the EPA listed the Lower Passaic River Site on the Superfund National Priorities the EPA's list of sites of national priority among the known releases or threatened releases of hazardous substances, pollutants, or contaminants throughout the United States and its territories.
In 1986, the EPA and the NJDEP issued several directives related to investigation and remediation of the Lister Site, which Tierra and Maxus owned during the relevant period. Around this same time, OxyChem's affiliate purchased the stock of Diamond Shamrock Chemicals Company from Maxus, which operated at the Lister Site. In 1988, the EPA notified OxyChem that it was a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation, and Liability Act and it was to implement remedial action selected by the EPA in the 1987 Record of Decision for the Lister Site.
In 2005, the NJDEP brought suit against OxyChem, among others, seeking response costs and other alleged damages in the Superior Court of New Jersey, Essex County, in a matter captioned New Jersey Department of Environmental Protection v. Occidental Chemical Corp., et al., Docket No. ESX-L-9868-05 (the “Spill Act Litigation”).
From 1988 to 2016, Maxus, Tierra and OxyChem retained, at various times, the law firms of Vinson & Elkins, LLP (“Vinson & Elkins”), Andrews & Kurth, LLP (“Andrews & Kurth”), and Drinker Biddle & Reath, LLP (“Drinker Biddle”) and various consultants to assist in the defense of regulatory actions and lawsuits against the Lister Site.
Between 2009 and 2012, documents were produced by Maxus in discovery in the Spill Act Litigation. OxyChem and Maxus were both parties to this litigation. In February 2011, Maxus produced the VE Memo, consisting of 66 pages of a three-million-page discovery response. According to the parties, the total discovery produced by Maxus in the Spill Act Litigation was approximately six million pages. OxyChem asserts that there were layers of protection to prevent against the disclosure of privileged documents. For instance, on August 11, 2009, the court in the Spill Act Litigation issued an Agreed Order Regarding Documents Withheld From Production which detailed an option to claw back inadvertently disclosed documentation pursuant to N.J. Ct. R. 4:10-2(e)(2). The parties to that litigation were informed that, in the event of inadvertent disclosure, the parties shall notify all other parties in writing. The parties in receipt of this documentation were to return, sequester, or destroy the documents promptly on notice. Between February 2011 and August 2011, Maxus clawed back documents on three occasions, but that did not include the VE Memo.
Following a production by Maxus in February 2011, OxyChem wrote to Maxus identifying privileged documents that had been inadvertently disclosed by Maxus, and Maxus confirmed that it would send a formal clawback letter to all parties. Inexplicably, Maxus did not send a clawback letter until February 2017, six years later. No action was taken by OxyChem in the interim. Further, the clawback demand was directed to fourteen counsel of record, rather than counsel for the hundreds of parties in the Spill Act Litigation. The attorney for the Joint Defense Group (“JDG”), which was a group of third-party defendants that included many of the current SPG Defendants in this lawsuit, acknowledged receipt of the clawback request, forwarded same to the member parties, informed OxyChem that the JDG no longer existed, and asserted that the privilege was likely waived.
In June 2016, Maxus filed for Chapter 11 bankruptcy, where it produced documents to OxyChem. In 2017, in the Bankruptcy Court, Judge Sontchi provided instruction to OxyChem that it would need to return to New Jersey State Court to claw back the Spill Act production. OxyChem never returned to the New Jersey State Court to do so.
LEGAL STANDARD
Rule 37 provides that a party may move for an order compelling disclosure or discovery. FED. R. CIV. P. 37(a)(1). Where the court orders production pursuant to a motion to compel, and a party fails to obey an order to provide or permit discovery, the court may issue further just orders, including sanctions. FED. R. CIV. P. 37(b)(2)(A).
Rule 26(b)(1) provides that parties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense and proportional needs of the case. See also W. Elec. Co. v. Stern, 544 F.2d 1196, 1199 (3d Cir. 1976). Rule 26(b)(5) permits a party to withhold information otherwise discoverable by claiming that the information is privileged or subject to protection as trial-preparation material. To assert a privilege or protection, the party must: (i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed-and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim. FED. R. CIV. P. 26(b)(5)(A). The party asserting a claim of privilege or protection must give notice to the receiving party that is “as specific as possible in identifying the information and stating the basis for the claim.” FED. R. CIV. P. 26, Advisory Committee Note to Subdivision (b)(5). The notice “should be sufficiently detailed so as to enable the receiving party and the court to understand the basis for the claim and to determine whether waiver has occurred.” Id. Accordingly, the party asserting a privilege or protection bears the burden of establishing its applicability on a document-by-document basis. United States v. Rockwell Int'l, 897 F.2d 1255, 1265 (3d Cir. 1990) (stating “privilege must be asserted” on “document-by-document” basis); In re Human Tissue Prod. Liab. Litig., 255 F.R.D. 151, 163 (D.N.J. 2008) (same).
Rule 502(b) of the Federal Rules of Evidence governs the disclosure of privileged information. When made in a federal proceeding or to a federal office or agency, the disclosure does not operate as a waiver if: (1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error, including (if applicable). FED. R. EVID. 502. The parties cite to differing standards for the disclosure of privileged communications: Gloucester Twp. Hous. Auth. V. Franklin Square Assocs., 38 F.Supp.3d 492, 496-97 (D.N.J. 2014) and In re Teleglobe Communications Corp., 493 F.3d 345, 379 (3d Cir. 2007).
In re Teleglobe is the standard that applies to joint-client privilege and the community-of-interest doctrine (“COI”), whereas Gloucester is the standard for inadvertent disclosure. The burden of proof for the privilege, its waiver and COI is:
The parties dispute whose burden it is to establish that the COI doctrine applies. This analysis is not difficult. It is well-established that the party seeking protection because of the work-product doctrine has the burden of proof. . . Thereafter, the party asserting that the protection was waived has the burden of proof. . . Plaintiff satisfied this burden by showing that defendants exchanged workproduct protected documents. Thereafter, the party denying waiver has the burden to show that the COI doctrine applies.McLane Foodservice, Inc. v. Ready Pac Produce, Inc., No. 10-6076 (RMB/JS), 2012 U.S. Dist. LEXIS 76343, at *10 (D.N.J. June 1, 2012).
ANALYSIS
I. The VE Memo
There is no dispute that the VE Memo is privileged under the work product doctrine.Indeed, the Order on Remand only instructs the Special Master “to make further factual findings on the record regarding whether the documents at issue were clawed back in the Spill Act litigation and, if they were not, whether any privilege is deemed waived as to the documents.” See Order on Remand at 10.
See Special Master Decision on SPG Motion to Compel, dated March 18, 2021 (ECF No. 1185) at 18 (“The documents reflect clear attorney work product, including drafts of documents that were prepared by counsel, or at the direction of counsel.”)
a. The VE Memo is Privileged Under the Joint-Client Privilege.
The joint-client privilege may apply when “two or more people consult a single attorney,” and as co-clients, “convey their desire for representation, and the lawyer consents.” In re Teleglobe, 493 F.3d at 362-63 (citations omitted). Whether parties have “jointly consulted a lawyer or merely entered concurrent but separate representations is determined by the understanding of the parties and the lawyer in light of the circumstances” and must be “distinguished from situations in which a lawyer represents a single client but another person with allied interests cooperates with the client and the client's lawyer.” Graco, Inc. v. Pmc Global, 2011 U.S. Dist. LEXIS 14718, at *59-60 (D.N.J. Feb. 14, 2011) (citing In re Teleglobe, 493 F.3d at 362; Restatement (Third) of the Law Governing Lawyers § 75 comment C).
While the joint-client privilege is not necessarily to be applied in every circumstance where two or more parties are seemingly aligned, if two or more persons are jointly represented by the same lawyer in a matter, a communication of either co-client that relates to matters of common interest is privileged as against third persons. See In re Teleglobe, 493 F.3d at 362; see also Graco, Inc. v. Pmc Glob., Civil Action No. 08-1304 (FLW), 2011 U.S. Dist. LEXIS 14718, at *61-62 (D.N.J. Feb. 14, 2011). The privilege also requires termination. “In particular, a joint representation terminates when it becomes clear to all parties that the clients' legal interests have diverged too much to justify using common attorneys.” Id.
“The great caveat of the joint-client privilege is that it only protects communications from compelled disclosure to parties outside the joint representation.” Id. at 366. “When former coclients sue one another, the default rule is that all communications made in the course of the joint representation are discoverable.” Id. Cross claims do not always create “the requisite adversity to eviscerate the joint defense privilege.” Resolution Tr. Corp. v. Fid. & Deposit Co., Civ. No. 92-1003(WHW), 1995 U.S. Dist. LEXIS 21903, at *5-6 (D.N.J. Apr. 27, 1995). Moreover, even if a cross claim was deemed sufficient, it does not render material subject to the joint-client privilege universally discoverable, but only discoverable as between the joint clients. Id.
Here, there is no question that there was a joint-representation. The issue for resolution is whether points of adversity in the relationship between the parties waived the joint-client privilege as it relates to third-parties. It is clear that OxyChem and Maxus were aligned with their interests of defense of claims against third-parties prior to and during the Spill Act Litigation. The VE Memo was created on September 24, 1996, prior to and in anticipation of the Spill Act Litigation, and contained advice that clearly related to their aligned interests. As the Order on Remand explains:
[T]o the extent that documents [were] created with respect to litigation on the cross-claim address an issue on which the parties have a joint interest-i.e. defending Spill Act litigation and minimizing liability-those communications may still be protected. However, communications where the parties are clearly adverse and share no common legal interest will not be privileged under either exception. Further review of the documents is necessary to make that distinction.[Order on Remand at 7, n.4.]
Accordingly, the VE Memo is privileged under the joint-client privilege. To be certain, the record reveals that the joint-client representation was not expressly terminated by OxyChem until 2007.
The community-of-interest doctrine only applies when clients are represented by separate counsel. McLane Foodservice, Inc. v. Ready Pac Produce, Inc., No. 10-6076, 2012 WL 1981559, at *3-4 (D.N.J. June 1, 2012). The VE Memo is a legal memoranda created by a single counsel for OxyChem's and Maxus's joint defense of the claims in the Spill Act Litigation. Thus, the community-of-interest privilege is inapplicable to the VE Memo.
b. The Inadvertent Disclosure by Maxus Did Not Waive OxyChem's Privilege
SPG Defendants assert that there was a waiver of the privilege in light of the disclosure of privileged documents in: (1) the Spill Act Litigation in the New Jersey Courts and the failure to clawback the documents; and (2) the Maxus bankruptcy proceeding. Neither argument has merit and the SPG Defendants have not carried the burden of showing that OxyChem's privilege related to the VE Memo was waived.
The attorney-client privilege protects communications between attorney and client and can be waived by disclosure. Teleglobe Communs. Corp., 493 F.3d at 359-361. Inadvertent disclosure, however, does not constitute waiver, if: (1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error, including (if applicable). FED. R. EVID. 502(b); see also Gloucester Twp. Hous. Auth. v. Franklin Square Assocs., 38 F.Supp.3d at 496. Here, Maxus clearly disclosed the VE Memo during the Spill Act Litigation. There were protections in place to avoid such inadvertent disclosures and notice was ultimately given to the relevant parties, albeit not in a timely manner. However, as OxyChem correctly notes, Maxus cannot waive OxyChem's joint-client privilege.
It is well-settled that “one co-defendant could not waive the privilege that attached to the shared information without the consent of all others.” In re Teleglobe Communs. Corp., 493 F.3d at 379. Indeed, “[w]aiving the joint-client privilege requires the consent of all joint clients.” Graco, Inc. v. Pmc Glob., Civil Action No. 08-1304 (FLW), 2011 U.S. Dist. LEXIS 14718, at *61-62 (D.N.J. Feb. 14, 2011). That Maxus and OxyChem‘s joint-client representation terminated after the VE Memo was created is of no moment, even when they had direct claims against each other. This adversity merely destroys the joint-privilege among and between Maxus and OxyChem. Resolution, 1995 U.S. Dist. LEXIS at *5-6.
Maxus's inadvertent disclosure cannot waive OxyChem's privilege. In fact, OxyChem explicitly informed Maxus that the documents were disclosed and requested that Maxus claw back the documents. Despite Maxus's failure to claw back the documents for years, OxyChem never consented to the disclosure or the waiver of the privilege.
Finally, the record does not reveal any disclosure in the Maxus bankruptcy of the VE Memo that would alter this ruling. Indeed, the bankruptcy orders and plans, including the April 17, 2017, Site Transition Order (“Site Transition Order”) and the July 18, 2017, Consent Order (“July Order”) confirm that the transition of Maxus documents to OxyChem was done without waiver of any privilege owned by Maxus or OxyChem.
Accordingly, the Special Master finds that the VE Memo is a document that is privileged under the joint-client privilege and OxyChem's privilege has never been waived. Thus, the VE Memo remains privileged and does not need to be disclosed.
II. H-1, H-3 and H-4 (“Documents”) for In Camera Review
a. In Camera Review For A Threshold Finding of Privilege
As described above, the Order on Remand provides: “to the extent documents were prepared by independent counsel and the community-of-interest or joint-client privilege does not apply, the Court remand[ed] to the Special Master to reconsider those documents and make specific findings” See Order on Remand at 7.
The Documents total 31,357 in number. Rather than conduct a full review of the Documents for privilege, the parties agreed to an in camera review of ten percent (10%) of the Documents by the Special Master. The Special Master undertook this review to make a threshold determination if the Documents contained privileged information. The Special Master performed this review and has created Schedule A, which is appended to this Decision. On Schedule A, specific documents are labeled to be produced, withheld, or redacted and produced.
Documents that are not privileged on their face should be produced. If the documents are to be withheld, the Special Master determined that a privilege applied and the document was properly on the privilege logs. In some instances, redactions are also required if the documents contain only some privileged information. OxyChem will need to redact the document accordingly and reproduce the portions of the documents that are not privileged.
When assessing the in camera documents, the Special Master considered: (1) the jointclient privilege and community-of-interest privilege, (2) the work product doctrine, and (3) the attorney-client privilege.
b. Withheld Documents
i. Joint Client Privilege/Community-of-Interest
As discussed above, a joint-client privilege may be waived where there are points of adversity in the relationship between the parties warranting production. Here, as set forth in Section 1(b) of this Decision, the Special Master found that there have been points of adversity between the parties, but the points of adversity have been related to indemnification. The parties remained aligned in their defense of claims against third parties. According to the SPG Defendants, the adversity related to cross claims and opposing positions on indemnification between 1995 and 2007. Following the termination of the joint-client privilege, the parties remained adverse through the Spill Act Litigation. But at the time of Maxus's Bankruptcy in 2016, the parties were again aligned in their interests.
The Special Master has reviewed documents for the period of the joint-client privilege with respect to aligned interests. The Special Master found documents that were privileged under the joint-client privilege and community-of-interest doctrine because OxyChem and Maxus, through their various attorneys (Vinson & Elkins, Andrews & Kurth, and Drinker Biddle), shared communications for a joint interest. The documents in Schedule A designated with these privileges reflect documents that address an issue in which OxyChem and Maxus were aligned, and either had the same counsel, or their counsel shared the information, and thus is not subject to disclosure.
ii. Work Product Privilege
The Special Master also undertook a review to determine whether Maxus waived the attorney-client privilege or the work product doctrine.
“When the corporation is solvent, the agent that controls the corporate attorney-client privilege is the corporation's management. . . [T]his power passes to the trustee because the trustee's functions are more closely analogous to those of management outside of bankruptcy than are the functions of the debtor's directors.” Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 356 (1985). “[T]he Liquidating Trust controls the privilege.” In re Hechinger Inv. Co. of Delaware, 285 B.R. 601, 613 (D. Del. 2002). As set forth separately in Maxus's bankruptcy, “[t]he Trust thus obtained whatever documents were then in Maxus's possession, including the otherwise privileged documents whose production was ordered in the New Jersey lawsuit.” Maxus Liquidating Tr. v. YPF S.A. (In re Maxus Energy Corp.), Nos. 16-11501 (CTG), 18-50489 (CTG), 2022 Bankr. LEXIS 3300, at *12 (Bankr. D. Del. Nov. 22, 2022).
Maxus shared the H-1, H-3 and H-4 Documents with OxyChem during Maxus's bankruptcy proceeding pursuant to the Site Transition Order and July Order. OxyChem argues that this negates any finding of waiver relating to the joint-client or community-of-interest privilege. SPG Defendants argue that the record of adversity between OxyChem and Maxus destroys the privilege regardless of when the documents were shared.
OxyChem and Maxus were sufficiently adverse from at least April 2007, when OxyChem terminated the joint representation and hired new counsel shortly thereafter, through the filing of the Maxus bankruptcy petition on June 17, 2016. During that period, OxyChem and Maxus had direct claims against each other and OxyChem refused to enter into joint representations. However, at the time of the transfer of the documents in the bankruptcy filing, OxyChem and Maxus were no longer adverse. Attorney work product and attorney-client communications of Maxus and OxyChem were exchanged with the protection of the Site Transition Order, the July Order and the Maxus Bankruptcy Plan preserving such privileges and affirmatively finding no waivers. For example, the Maxus Bankruptcy Plan vested Maxus and Tierra's privilege in the Maxus Liquidating Trust and provides for non-waiver of privileges. Specifically, the Maxus Bankruptcy Plan states:
In connection with the Liquidating Trust Assets, any attorneyclient privilege, work product privilege, joint interest privilege or other privilege or immunity attaching to any documents or communications (in any form, including, without limitation, written, electronic or oral) shall be transferred to and shall vest in the Liquidating Trust. The Liquidating Trust's receipt of such privileges associated with the Liquidating Trust Assets shall not operate as a waiver of those privileges possessed or retained by the Debtors, nor shall it operate to eliminate the rights of any codefendant to any applicable joint privilege.[Maxus Bk. Plan, Art. VI.C (emphasis added)]
Specifically, the production of those materials, after the bankruptcy filing, to OxyChem, was not a production to an adverse party and did not waive any attorney-work product protection. See Westinghouse Elec. Corp. v. Republic of Phil., 951 F.2d 1414, 1428 (3d Cir. 1991); United States v. Mass. Inst. of Tech., 129 F.3d 681, 687 (1st Cir. 1997); Planalto v. Ohio Cas. Ins. Co., 256 F.R.D. 16, 18 (D. Me. 2009) (stating transfer between parties who are no longer adverse-but once were-does not waive protection).
If Maxus obtained the documents independently, the attorney-client and work product privileges remain with those documents. Maxus transferred the Documents to OxyChem pursuant to the Bankruptcy Order, which had non-waiver provisions. While the Order on Remand required consideration of the Documents' context to determine the applicability of the joint-client privilege and the community-of-interest doctrine, the Special Master's review must also consider whether the documents retained Maxus's attorney-client privilege and the work product doctrine after they were provided to OxyChem. The Special Master finds that the work product privilege remained with the documents shared by Maxus in the Bankruptcy Proceeding and has considered this in its review.
Under Rule 26(b)(3), the work product doctrine protects “documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative.” FED. R. CIV. P. 26(b)(3)(A). Work product is defined as materials in anticipation of litigation, including mental impressions, legal theories, opinions, conclusions, litigation strategy, and other similar materials. See FED. R. CIV. P. 26(b)(3)(B). Documents that are routinely prepared in the ordinary course of business are outside the scope of work product protection. See In re Gabapentin Litig., 214 F.R.D. 179, 184 (D.N.J. 2003).
The lynchpin for the application of the work product doctrine is the phrase “in anticipation of litigation.” Maertin v. Armstrong World Indus., 172 F.R.D. 143, 148 (D.N.J. 1997). To meet this standard, the party must show more than a “remote prospect” or “likely chance of litigation.” In re Gabapentin Litig., 214 F.R.D. at 183. It must be shown that “the document can fairly be said to have been prepared or obtained because of the prospect of litigation” given the nature of the document and factual situation of the particular case. Maertin, 172 F.R.D. at 148; see also In re Gabapentin Litig., 214 F.R.D. at 184 (stating whether document is protected by work product doctrine depends on reason or purpose for documents creation”).
Here, some of the in camera documents were created by in-house counsel, outside counsel and consultants that were clearly work product created in anticipation of litigation. For others, the Special Master could not determine whether the document was produced in the ordinary course of business or created in anticipation of litigation. Schedule A contains the Special Master's findings based on the face of the documents and direct that those covered by the work product privilege be withheld from disclosure as there was no waiver of such privilege.
iii. Attorney-Client Privilege
The attorney-client privilege is the oldest of the common-law privileges. Like all privileges, it is an exception to the common-law maxim that the public has a right to every man's evidence. Teleglobe Communs. Corp., 493 F.3d at 359-60 (internal citations omitted). “As the Supreme Court has noted more recently, 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 administration of justice.” Id. (quoting Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981)).
As discussed above, any existing privilege remained with the documents through the transfer of Maxus's documents in bankruptcy. The Special Master conducted an in camera review of the sample documents for attorney-client privilege. Some of the documents consisted of communications with in-house or outside counsel seeking legal advice, while others consisted of internal communications without attorneys. Schedule A contains the Special Master's determination as to the applicability of the attorney-client privilege to the documents reviewed and directs that those containing attorney-client privileged communications be withheld.
III. CONCLUSION
Accordingly, the Motion for production of documents is hereby GRANTED IN PART and DENIED IN PART. After review of the in camera documents, the Special Master has listed in Schedule A whether the documents require production or may be withheld. This Decision applies only to the documents reviewed in camera. The Special Master will conduct a conference with the parties to discuss how to proceed for the remainder of the documents from H-1, H-3, and H-4. The Special Master will not conduct this conference with the parties until the resolution of the SPG Defendants' Motion for Leave to File an Unopposed Motion for a Stay.