Opinion
00 Civ. 5712(LTS)(THK)
December 5, 2003
Elisabeth Seieroe Maurer, Esq., Ridgefield, Connecticut Andrew B. Bittens, Esq., Kucker Bruh, LLP, New York
MEMORANDUM OPINION AND ORDER
This action involves a painting known as "Grand Canyon," painted by Arthur Wesley Dow, which was purchased at auction by Plaintiff, Spanierman Gallery ("Spanierman"), and subsequently seized by the FBI. The auction house from which Plaintiff bought the painting had purchased it from Timothy Pagan ("Fagan"). Fagan, in turn, had secured the painting from Defendant, Mary Merritt ("Merritt"). Fagan represented that he had purchased the painting, along with other items, from Merritt. Merritt contends that she never sold the painting, but merely gave it to Fagan to have it appraised. In this action, which was referred to this Court for general pretrial supervision, the Spanierman Gallery seeks to establish its rightful title to the painting.
Presently before the Court is a motion in limine brought by Defendant Merritt.
BACKGROUND
Prior to the initiation of this action, Merritt brought an action against Fagan in the Connecticut state courts. She was initially represented in that case by John Bonee, III. In early 2000, Elisabeth Seieroe Maurer, was retained to represent Merritt in the Connecticut proceeding. Upon her retention, Maurer and Merritt contacted the FBI to report the circumstances surrounding the loss of the painting, and to get assistance in securing its return. (See Affirmation of Elisabeth Seieroe Maurer, Esq., dated Nov. 4, 2003 ("Maurer Aff.") ¶ 3.) In the course of the FBI investigation, Maurer, Merritt, Bonee, and Katra Showah, who is Merritt's niece, were all interviewed by FBI agents, and Maurer, Merritt, and Bonee voluntarily provided numerous documents to the FBI. (See id. ¶¶ 4-7.) Ultimately, the FBI seized the painting from Plaintiff, although no criminal charges were brought against Fagan. Plaintiff then initiated this action to regain possession of the painting. Plaintiff secured leave of the Court (Swain, J.) to serve the FBI with a subpoena for all documents and other information contained in its investigative file. (See Order, dated July 25, 2003.) Merritt's counsel opposed the issuance of the subpoena, characterizing it as a "fishing trip to bolster [Plaintiff's] claim." (Letter from Elisabeth Seieroe Maurer to the Court, dated Aug. 8, 2003.) Plaintiff's counsel is presently in possession of the documents from the FBI file, and Merritt now claims that many of the documents secured from the FBI are protected attorney-client communications and work product. Plaintiff responds, inter alia, that any privilege which attached to the documents was waived when they were produced to the FBI, and when Defendant failed to object to the subpoena on privilege grounds.
In her in limine motion, Merritt now seeks (1) the return of all privileged documents, (2) to prohibit Plaintiff from using in any manner information derived from the documents, (3) to prohibit Plaintiff from offering in evidence or soliciting any evidence or testimony based upon any privileged documents, and (4) to preclude Plaintiff from offering any FBI reports in evidence, or soliciting any testimony from the FBI about what FBI agents were told during investigative interviews, on the grounds that such evidence would be inadmissible hearsay.
DISCUSSION
I. Waiver of the Attorney-Client Privilege and Work Product Protection
A. Applicable Law
The Court assumes for the purpose of the instant motion that the documents in issue either contain communications which are protected by the attorney-client privilege or constitute attorney work product. Therefore, the sole question to be addressed is whether those privileges have been waived by the production of the documents in issues to the FBI.
Because the protection which attaches to attorney-client communications serves a different purpose than that which relates to work product, each may be waived in different ways, and conduct which waives one privilege does not necessarily lead to a waiver of the other.
The attorney-client privilege protects communications made in confidence between a client and an attorney in order to obtain legal counsel. The goal behind the privilege is to "encourage clients to confide in their attorneys fully and frankly, free from the apprehension of disclosure. . . ." In re Six Grand Jury Witnesses, 979 F.2d 939, 943 (2d Cir. 1992); see also Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682 (1981) (same);In re Grand Jury Proceedings, 219 F.3d 175, 182 (2d Cir. 2000) ("The administration of the privilege in the courts requires recognition that `sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer's being fully informed by the client.'") (quoting In re Von Bulow, 828 F.2d 94, 100 (2d Cir. 1987) (in turn quoting Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677 (1981)).) Because the privilege requires that protected communications be made in confidence and kept confidential, disclosure of a privileged communication to a third party, other than someone with whom the party shares a common interest and who is bound to maintain its confidentiality, will result in a waiver of the privilege.
The work product doctrine protects materials produced by an attorney for, or in anticipation of, litigation. See Fed R. Civ. P. 26(b)(3); United States v. Adlman, 134 F.3d 1194, 1197-98 (2d Cir. 1998) (work product doctrine protects documents that were prepared because of existing or expected litigation). "The logic behind the work product doctrine is that opposing counsel should not enjoy free access to an attorney's thought processes." In re Steinhardt Partners, L. P., 9 F.3d 230, 234 (2d Cir. 1993); see also Hickman v. Taylor, 329 U.S. 495, 510, 67 S.Ct. 385, 393 (1947) ("In performing his various duties, . . . it is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel."); In re Six Grand Jury Witnesses, 979 F.2d at 944 ("[T]he work product doctrine provides a zone of privacy for a lawyer; the doctrine grants counsel an opportunity to think or prepare a client's case without fear of intrusion by an adversary."). The work product doctrine protects not only materials which are prepared by attorneys themselves, but also by their agents.See United States v. Noble, 422 U.S. 225, 238-39, 95 S.Ct. 2160 (1975). Unlike waiver of the attorney-client privilege, work product is not automatically waived once produced to a third party. Rather, it is waived when its production to another is inconsistent with the protection: See GAF Corp, v. Eastman Kodak Co., 85 F.R.D. 46, 51 (S.D.N.Y. 1979). Work product may be shown to others, "simply because there was some good reason to show it" without waiving the privilege. Adlman, 134 F.3d at 1200 n. 4 (2d Cir. 1998). However,
[o]nce a party allows an adversary to share the otherwise privileged thought processes of counsel, the need for the privilege disappears. Courts therefore accept the waiver doctrine as a limitation on work product protection. The waiver doctrine provides that voluntary disclosure of work product to an adversary waives the privilege as to other parties.Steinhardt, 9 F.3d at 235. Moreover, "even a disclosure to a non-adversary that `substantially' or `materially' increases the likelihood that an adversary will obtain the information results in a waiver of the work product protection." Bank of America, N.A. v. Terra Nova Ins. Co., 212 F.R.D. 166, 170 (S.D.N.Y. 2002); see also Bank Brussels Lambert v. Chase Manhattan Bank, N.A., Nos. 93 Civ. 5298, 93 Civ. 8270, 94 Civ. 1317, 93 Civ. 6876 (LMM) (RLE), 1996 WL 944011, at *3 (S.D.N.Y. Dec. 19, 1996) ("Work product immunity is waived only if the party has voluntarily disclosed the work-product in such a manner that it is likely to be revealed to his adversary.") (quoting Bowne of New York City, Inc. v. Ambase Corp., 150 F.R.D. 465, 479 (S.D.N.Y. 1993)) (internal quotation marks omitted);GAF, 85 F.R.D. at 52 (same).
B. Application to Merritt's Production to FBI
1. Attorney-Client Communications
Applying these principles to Merritt's and her attorneys' production of attorney-client communications to the FBI leaves little question that the privilege has been waived. Merritt and her attorneys voluntarily produced privileged information to the FBI. The FBI and Merritt did not have a "joint defense" agreement and did not share a common interest. Presumably, the documents were produced to the FBI in order to obtain its assistance in securing the return of the painting. But, at the time, the FBI was simply agreeing to undertake an investigation. It had not determined that Merritt's position was sound, and that Fagan or Plaintiff were wrongdoers who should be prosecuted. In addition, Merritt took no precautions to preserve the privilege when the documents were produced to the FBI. They were not labeled "confidential" or "privileged," and there was no agreement with the FBI that the documents were to be treated as privileged and confidential, and should not be produced to third parties. Having voluntarily disclosed attorney-client confidences to a third party, Merritt waived the protection of the attorney-client privilege.
Moreover, contrary to Defendant's contention, the production of the privileged material to the FBI cannot be excused as inadvertent or simply a mistake. This is not the typical situation where a party who took reasonable precautions to protect privileged communications mistakenly produced a few privileged documents in the course of a very substantial production. See, e.g., United States v. Rigas, 281 F. Supp.2d 733, 738-41 (S.D.N.Y. 2003); Deere Co. v. MTD Prods., Inc., No. 00 Civ. 5936 (LMM) (JCF), 2003 WL 21921265, at *1 (S.D.N.Y. Aug. 1, 2003). Here, a conscious decision was made to turn over the material. In fact, it was not only Merritt's former attorney, John Bonee, who produced privileged material to the FBI. Her present counsel, as well, produced both work product and privileged attorney-client communications to the FBI. (See Maurer Aff. ¶¶ 4-7.) Although Merritt's present counsel terms the production a "mistake," it may have been a mistake of judgment, but not an unintended act.
Defendant's contention that she only authorized Bonee to speak to the FBI, not to produce documents, is of little consequence. First, there is no competent evidence of this contention, since it is simply made by counsel, not by Merritt herself, under oath. Moreover, the note which has been submitted with the motion, authorizing Bonee to speak to FBI agents,see Maurer Aff. Ex. B, is not addressed to Bonee and does not set the parameters of Bonee's authority. It appears to have been intended for the FBI to facilitate their speaking with Bonee. (Bonee has not submitted an affidavit in support of Merritt's motion, suggesting otherwise.) In any event, it was not simply Bonee who provided privileged communications to the FBI. Maurer did as well, and Merritt does not argue that she was not authorized to do so.
Accordingly, Merritt has waived the attorney-client privilege. Her request to have the privileged documents returned, and to preclude Plaintiff from using or referring to them at trial, is denied.
2. Work Product
The issue of waiver with respect to work product is more complex. As discussed, disclosure of work product to a third party does not necessarily waive work product protection if it was not disclosed to an adversary or one who stands in a potentially adversarial position to the client, or if did not substantially increase the likelihood of it being revealed to an adversary. See Bank of America, 212 F.R.D. at 170. For example, in theGAF case, GAF's counsel met with counsel for the government to discuss the government's involvement in an investigation of Kodak, with whom GAF was in litigation. In response to a Civil Investigative Demand, GAF produced to the government work product material. The Court concluded that even if the act of production was viewed as voluntary, there was no waiver of work product protection because the government did not stand in an adversarial position to GAF and there was no probability that producing the documents to the government substantially increased the likelihood of Kodak obtaining the information; there was an explicit statutory prohibition on the government's revealing GAF's documents without GAF's consent. See GAF, 85 F.R.D. at 51-52. By contrast, in Steinhardt, the Court found that the voluntary disclosure of documents to the SEC constituted a waiver of work product protection because the SEC was investigating Steinhardt, and even though it had not instituted formal enforcement proceedings, it stood in an adversarial position to Steinhardt. Moreover, by voluntarily choosing to produce the information, Steinhardt made a determination that the benefit it hoped to secure from" the SEC outweighed its interest protecting its work product. See Steinhardt, 9 F.3d at 234-36.
Similarly, in Bank of America where a corporation voluntarily provided work product to the New York State Insurance Department, which was investigating the fraudulent conduct of an insurance agent who improperly represented that he acted with the corporation's authority, the court found a waiver of work product protection, even though the corporation itself was not the subject of any investigation when the material was produced. See Bank of America, 212 F.R.D. at 172. The court concluded that there was a potentially adversarial relationship between the corporation and governmental authorities, since the corporation itself could have become the target of an investigation, and there was reason to believe that it disclosed the information with the hope that it would forestall such an investigation.Id. The court further concluded that "the purpose of such a disclosure is foreign to the objectives underlying the work-product doctrine." Id. (quoting Westinghouse Elec. Corp, v. Republic of Phillipines, 951 F.2d 1414, 1429 (3d Cir. 1991)) (internal quotations marks omitted). In addition, the court found that if even if there was no adversarial relationship with the government, the work product protection was waived because the disclosure of the materials to the government substantially increased the likelihood that the they would be disclosed to an adversary. Id. at 172-73. The rogue insurance agent stood in an adversarial position to the company, and by disclosing information to the government in the hope that it would prosecute the agent, without any agreement concerning confidentiality, there was a substantial likelihood that the information would become available to the agent, either at trial or in the course of an investigation. Under such circumstances, the court concluded that the corporation "showed a conscious disregard for the possibility that an adversary . . . might obtain access to the information." Id. at 173; see also Information Resources, Inc. v. Dun Bradstreet Corp., 999 F. Supp. 591, 593 (S.D.N.Y. 1998) (where plaintiff voluntarily submitted work product material to government agency to incite it to initiate action against its adversary, work product protection was waived; "This vindicates the principle of full disclosure, prevents the unfairness of selective revelations, and reflects the common-sense perception that in most such cases the privacy attending creation of the work-product had either served its purpose or was of little importance in the first place.").
Applying these principles to Merritt's actions in this case, the Court concludes that Merritt has waived work product protection. Two of Merritt's attorneys voluntarily produced work product materials to the FBI in an effort to secure its assistance in retrieving the painting, and to encourage it to initiate an investigation of Fagan. Although the FBI and Merritt were not adversaries, they did not, as Defendant suggests, share a common interest. Merritt's interest in prevailing against Fagan and Plaintiff, and thereby securing the return of the painting, was not the FBI's interest. It had an obligation to perform an objective investigation of Merritt's allegations. Moreover, the production to the FBI substantially increased the likelihood that privileged information would be secured by Merritt's adversaries. The production to the FBI was not made under circumstances which would ensure the confidentiality of the material. The documents provided to the FBI were not identified as "privileged," and no agreement was reached with the FBI to treat the information as privileged. Moreover, Merritt did not seek to retrieve the documents from the FBI until 2002, two years after they had been produced to the FBI, and two years into this litigation. Thus, as could have been anticipated, an adversary subpoenaed the information from the FBI, and the FBI had no sound basis on which to object to the subpoena. Finally, even when the subpoena issued, Defendant did not seek to quash the subpoena on the grounds that it called for the production of privileged information. Consequently, she effectively acceded to Plaintiff's securing and viewing the purportedly privileged documents.
Although the FBI made a pro forma objection to the subpoena to the extent that it sought privileged information, at the same time it produced all of its files. See Seieroe Aff. Ex. D. Moreover, it is apparent that the FBI's concern with privilege, if any, was its own privilege, not Merritt's.
Merritt's counsel's claim that she only became aware of the fact that the FBI had produced privileged information to Plaintiff after its production, is not credible. See Seieroe Aff. ¶ 10. She acknowledges that she produced work product to the FBI, and that when she later requested the return of Mrs. Merritt's entire file, the FBI only returned a limited number of documents. See id. ¶¶ 4-8. At that point, she was on notice that other documents which she had produced to the FBI remained with the FBI, and were therefore subject to the subpoena.
Under these circumstances, the Court concludes that Merritt and her attorneys consciously disregarded the possibility that an adversary might obtain the protected materials. Accordingly, work product protection has been waived and Spanierman is free to utilize the information obtained from the FBI.
II. Admissibility of Interview Reports
Defendant seeks to preclude Plaintiff from using or offering in evidence any of the interview reports written by FBI agents, arguing that they constitute inadmissible hearsay. Specifically, Defendant contends that because the reports contain FBI staff notes of what various parties, including Merritt, her attorneys, and her niece, told FBI agents, they contain two layers of hearsay. See Mem. of Law in Support of Defendant's Motion in Limine, at 13. Defendant's position is meritless.
As is true for police reports, FBI reports are admissible in evidence as either business records, see Fed.R.Evid. 803(6), or as public records, see Fed.R.Evid. 803(8). See also Parsons v. Honeywell, Inc., 929 F.2d 901, 907 (2d Cir. 1991) (police report admissible as public record under Rule 803(8)); Gentile v. County of Suffolk, 926 F.2d 142, 147-48, 151-52 (2d Cir. 1991) (investigative report of district attorney's office and police department admissible under Rule 803(8)(C)); Bradford Trust Co. of Boston v. Merrill. Lynch. Pierce, Fenner and Smith, Inc., 805 F.2d 49, 54 (2d Cir. 1986) (FBI reports admissible under Rule 803(8)(C), unless there has been an affirmative showing of untrustworthiness);Rosario v. Amalgamated Ladies' Garment Cutters' Union, 605 F.2d 1228, 1250-51 (2d Cir. 1979) (police report admitted under Rule 803(6), where information was provided to the police by the defendant).
While it is true that statements of third parties which are recorded in a report may be hearsay, see Parsons, 929 F.2d at 907-08, any statements made by Merritt, her attorneys, and her niece, to the FBI, constitute admissions by Merritt or her agents acting on her behalf or with her authorization, and thus are not hearsay. See Fed.R.Evid. 801(d)(2); Tokio Marine Mgmt., Inc. v. M/V Zim Tokyo, No. 91 Civ. 0063 (PKL), 1993 WL 322869, at *9 (S.D.N.Y. Aug. 17, 1993) ("It is well settled that the police report itself would be admissible as an exception to the hearsay rule either as a business record under Fed.R.Evid. 803(6) or a public record under Fed.R.Evid. 803(8). . . . [S]ince the statements contained in the police report are attributable to employees of [defendant] who are reporting crimes, those statements clearly would be admissible as admissions by a party-opponent under Rule 801(d)(2).") (internal citations omitted); see also H. Sand Co., Inc. v. Airtemp Corp., 934 F.2d 450, 454-55 (2d Cir. 1991) (documents containing statements made by defendant and its agents are not hearsay because they constitute admissions of a party-opponent).
Accordingly, Defendant's motion in limine is denied.
The record before the Court does not contain the FBI reports, and thus this decision only addresses the general issue of the admissibility of the reports as business records or official records, as well as the admissibility of statements by defendant or her agents which are contained in the reports.