U.S. Home Corp. v. Settlers Crossing, LLC
U.S. Home Corp. v. Settlers Crossing, LLC
2011 WL 13223911 (D. Md. 2011)
August 8, 2011
Connelly, William, United States Magistrate Judge
Summary
The court found that U.S. Home and Greenberg Traurig waived the privileges with regard to the ESI disclosed, including emails, pleadings, correspondence, attorney notes, and litigation research memorandums. The court found that U.S. Home inadvertently disclosed one document, and waived the privileges with regard to the remaining documents disclosed.
Additional Decisions
U. S. HOME CORPORATION, Plaintiff,
v.
SETTLERS CROSSING, L.L.C., Washington Park Estates, LLC, Bevard Development Co. & Steven B. Sandler, Defendants.
Settlers Crossing, L.L.C., Washington Park Estates, LLC, Bevard Development Co. & istar Financial, Inc., Counterplaintiffs,
v.
U.S. Home Corporation & Lennar Corporation, Counterdefendants
v.
SETTLERS CROSSING, L.L.C., Washington Park Estates, LLC, Bevard Development Co. & Steven B. Sandler, Defendants.
Settlers Crossing, L.L.C., Washington Park Estates, LLC, Bevard Development Co. & istar Financial, Inc., Counterplaintiffs,
v.
U.S. Home Corporation & Lennar Corporation, Counterdefendants
Civil Action No. DKC-08-1863
United States District Court, D. Maryland
Signed August 08, 2011
Counsel
Adam B. Lavinthal, David L. Harris, David S. Sager, Jason E. Halper, Lowenstein Sandler PC, Ryan J. Cooper, Goodell DeVries Leech and Dann LLP, Roseland, NJ, Daniel M. Petrocelli, David Marroso, O'Melveny and Myers LLP, Los Angeles, CA, David Kendall Roberts, O'Melveny and Myers LLP, Rakesh Kilaru, Wilkinson Walsh + Eskovitz LLP, Washington, DC, for Plaintiff.Thomas R. Folk, John J. Sabourin, Jr., Joseph Severino Luchini, Stephen Todd Fowler, Reed Smith LLP, Falls Church, VA, Lawrence Roger Holzman, The Holzman Law Firm, Timothy Francis Maloney, Veronica Byam Nannis, Kara L. Fischer, Joseph Greenwald and Laake PA, Greenbelt, MD, Eric A. Kuwana, Katten Muchin Rosenman LLP, Washington, DC, Jennifer Cecelia Ryan, Timothy J. Patenode, Katten Muchin Rosenman LLP, Chicago, IL, for Defendants.
Connelly, William, United States Magistrate Judge
ORDER
*1 At the August 8, 2011 motions hearing, the Court granted iStar's Cross-Motion for Determination of Privilege and Leave for In Camera Review, took under advisement U.S. Home's Motion for Enforcement of Stipulated Order Regarding Inadvertent Disclosure of Privileged Material, and received from iStar the disputed “inadvertently” disclosed documents. Having reviewed the disputed “inadvertently” disclosed documents, IT IS this 19th day of August, 2011, by the United States District Court for the District of Maryland, ORDERED:
1. That U.S. Home's Motion for Enforcement of Stipulated Order Regarding Inadvertent Disclosure of Privileged Material (Document No. 211) BE, and the same hereby IS, GRANTED IN PART & DENIED IN PART for the reasons stated below;
2. That on May 4, 2010 this Court approved and entered “Stipulated Order Regarding Confidentiality of Discovery Material and Inadvertent Disclosure of Privileged Material (Local Rule 104.13)” [Document No. 113];
3. That relevant to the present dispute are paragraphs 6 and 7 of the Stipulated Order which state,
Non-waiver of privilege for inadvertently disclosed materials. Pursuant to Fed. R. Evid. 502(d), the inadvertent disclosure of any document that is subject to a legitimate claim that the document is subject to the attorney-client privilege or the work-product protection shall not waive the protection or the privilege for either that document or for the subject matter of that document.
Return of inadvertently disclosed materials. Except in the event that the requesting party disputes the claim, any documents the producing party deems to have been inadvertently disclosed and to be subject to the attorney-client privilege or the work-product protection shall be, upon written request, promptly returned to the producing party, or destroyed, at the party's option. If the claim is disputed, a single copy of the materials may be retained by the requesting party for the exclusive purpose of seeking judicial determination of the matter pursuant to Fed. R. Civ. P. 26(b)(5)(B) and Fed. R. Evid. 502[;]
4. That U.S. Home argues, by the terms of the above Stipulated Order, “the producing party may unilaterally determine whether a production was inadvertent, and there is no further burden that must be met to trigger the claw-back obligations under the Stipulated Order.” Document No. 222 at 4;
5. That the Stipulated Order is not as limited as U.S. Home contends. The Stipulated Order contemplates that a requesting party may dispute the claim of inadvertent disclosure. Under such circumstances, the requesting party may retain a single copy of the disputed materials for the exclusive purpose of seeking judicial determination. The Court finds iStar's actions with regard to the disputed documents produced by U.S. Home's former counsel (Greenberg Traurig) is an accord with the letter and spirit of paragraph 7 of the Stipulated Order;
6. That iStar asserts three bases for denying U.S. Home's Motion: (a) the documents produced by Greenberg Traurig were not inadvertent; (b) U.S. Home waived any claims of privilege because its former counsel, Greenberg Traurig, failed to produce a privilege log; and (c) the documents produced by Greenberg Traurig fall within the crime-fraud exception to the attorney-client privilege;
*2 7. That the Court will address iStar's second basis for denying U.S. Home's Motion first. As the Court noted during the August 8, 2011 motions hearing, privilege logs in this case have been slow in coming. The Court commented that because it has not pressed on the issue of privilege logs, the Court wondered whether it is fair to press on this issue with regard to this particular dispute. The Court is aware of the pursuit of this issue (lack of a privilege log) by U.S. Home in the Southern District of New York. After reading and considering arguments in support of and opposition to the second basis for denial, the Court reaffirms its assessment articulated at the August 8, 2011 motions hearing, namely, privilege logs have been slowly in coming in this case, the Court has not pressed on the issue of production of privilege logs and thus it is not fair to impose such a standard for the first time on a third party, Greenberg Traurig;
8. That iStar's third basis for denying U.S. Home's Motion is that the documents produced fall within the crime-fraud exception to the attorney-client privilege;
9. That the crime-fraud exception to the attorney-client privilege is defined as follows:
The invocation of the crime-fraud exception requires a prima facie showing that “(1) the client was engaged in or planning a criminal or fraudulent scheme when he sought the advice of counsel to further the scheme, and (2) the documents containing the privileged materials bear a close relationship to the client's existing or future scheme to commit a crime or fraud.” A party invoking the crime-fraud exception can satisfy the first prong of this test by making a prima facie showing of evidence, which, if accepted by the trier of fact, establishes the elements of an ongoing or prospective violation of the law. The second prong of this test is satisfied with a showing of a close relationship between the withheld communications and the alleged violation.
In re Grand Jury Investigation, 352 Fed.Appx. 805, 808, 2009 WL 3969843, at *3 (4th Cir. Nov. 20, 2009) (quoting In re Grand Jury Proceedings #5, 401 F.3d 247, 251 (4th Cir. 2005) (citations omitted));
10. That iStar asserts the disputed documents produced by Greenberg Traurig reflect,
[I]n late 2007, [U.S. Home] was invoking the assistance of counsel to breach the contract or to find other mechanisms altogether to avoid its contractual obligations and mislead the Sellers. In other words, to avoid closing under the Purchase Agreement, [U.S. Home] was not merely investigating what contract rights it could assert under the Purchase Agreement; it was going outside the contract documents altogether to continue to find ways to “stonewall” the Sellers, who, ignorant to [U.S. Home's] machinations, naively were still dutifully performing under the Purchase Agreement long after [U.S. Home] had made the decision to “mothball” the Bevard project indefinitely.
Document No. 226 at 9;
11. That U.S. Home rejects iStar's contention that the disputed documents produced by Greenberg Traurig reflect actions in furtherance of a future or ongoing crime or fraud.
Even if U.S. Home had sought Greenberg Traurig's advice regarding U.S. Home's legal options to avoid closing under the Purchase Agreement, as iStar urges, seeking or rendering such advice is neither fraudulent nor criminal and therefore does not justify application of the crime-fraud exception ... It is neither a crime, nor a fraud, nor a breach of contract to ask counsel to evaluate U.S. Home's rights under the Purchase Agreement.
Document No. 222 at 11-12;
12. That the Court has reviewed in camera the disputed documents produced by Greenberg Traurig. The Court finds iStar has not satisfied its burden by making a prima facie showing that the crime-fraud exception to the attorney-client privilege applies. The Court agrees with U.S. Home that the disputed documents are “post-litigation materials relating to U.S. Home's defenses, discovery, and litigation strategy stemming from Sellers' ... lawsuit.” Id. at 14;
*3 13. That iStar's remaining basis for denying U.S. Home's Motion is that the disputed documents produced by Greenberg Traurig were, in fact, not inadvertently disclosed;
14. That the Court's analysis begins with Federal Rule of Evidence 502(e)which states, “An agreement on the effect of disclosure in a Federal proceeding is binding only on the parties to the agreement, unless it is incorporated into a court order.” That such an agreement on the effect of disclosure was incorporated into a court order. See Document No. 113 (Stipulated Order of May 4, 2010). This agreement, incorporated into a court order, applies to disclosures by third parties;
15. That the Stipulated Order contains a “claw-back” provision. If a receiving party is informed of an inadvertent disclosure and does not dispute the claim of inadvertent disclosure, then the receiving party, upon written request, shall promptly return to the producing party or destroy the inadvertently disclosed materials;
16. That the Stipulated Order also provides that if a receiving party is informed of an inadvertent disclosure and disputes the claim of inadvertent disclosure, the receiving party may retain a single copy of the materials for the exclusive purpose of seeking judicial determination pursuant to Federal Rule of Evidence 502 and Federal Rule of Civil Procedure 26(b)(5)(B);
17. That because the receiving party disputes the claim of inadvertent disclosure and seeks a judicial determination, the application of the “claw-back” provision is suspended;
18. That this Court looks to Federal Rule of Evidence 502 and Federal Rule of Civil Procedure 26(b)(5)(B) in determining whether the disclosed materials were inadvertent or not;
19. That Federal Rule of Civil Procedure 26(b)(5)(B) states,
If information produced in discovery is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the court under seal for a determination of the claim. The producing party must preserve the information until the claim is resolved[;]
20. That paragraphs 6 and 7 of the Stipulated Order are identical to paragraphs 6 and 7 of the Standard Form, “Stipulated Order Regarding Confidentiality of Discovery Material and Inadvertent Disclosure of Privileged Material,” which is part of the Local Rules of this Court. As crafted, paragraphs 6 and 7 are similar but not identical to Federal Rule of Civil Procedure 26(b)(5)(B). Notably, the Rule requires the receiving party to return, sequester or destroy the disputed disclosed materials, whereas the Stipulated Order governing this litigation permits the receiving party to retaina single copy of the disputed disclosed materials for the purpose of seeking judicial determination. Because such a difference exists, the procedure outlined in the Stipulated Order controls. See Fed. R. Evid. 502(e);
*4 21. That, pursuant to Federal Rule of Evidence 502(b), when made in a Federal proceeding, a disclosure does not operate as a waiver in a Federal proceeding if three conditions are satisfied, specifically,
(a) “the disclosure is inadvertent;”
(b) “the holder of the privilege or protection took reasonable steps to prevent disclosure; and”
(c) “the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B)[;]”
22. That the word inadvertent is not defined in Federal Rule of Evidence 502(b). The Court adopts the following definitions as listed in Webster's New Universal Unabridged Dictionary 964 (1996): “1. unintentional: an inadvertent insult. 2. not attentive; heedless. 3. of, pertaining to, or characterized by lack of attention[;]”
23. That U.S. Home, as the client, is the holder of privilege and, either expressly or through conduct (“implied waiver”), can waive it. Hawkins v. Stables, 148 F.3d 379, 384 (4th Cir. 1998);
24. That the work product privilege protects the work of an attorney performed in preparation for litigation. Work product is subdivided into two categories: fact work product and opinion work product. Fact work product does not contain an attorney's mental impression, whereas opinion work product contains an attorney's mental impression. In re Grand Jury Proceeding #5, 401 F.3d 247, 250 (4th Cir. 2005);
25. That it is undisputed, as acknowledged by counsel for both iStar and U.S. Home, that the documents produced by Greenberg Traurig are protected by the attorney-client privilege and work-product immunity;
26. That the Court finds the following relevant in making its determination under Federal Rule of Evidence 502:
a. On October 26, 2010 iStar notified Womble Carlyle, present counsel for U.S. Home, that it is serving subpoena duces tecums on five third-parties including Greenberg Traurig. See Document No. 212, Ex. 2;
b. On December 13, 2010 at 3:50 p.m., iStar served a subpoena duces tecum on Greenberg Traurig. See id., Ex. 1. The subpoena duces tecumsought non-privileged documents and correspondence relevant to U.S. Home's and/or Greenberg Traurig's work related to the Bevard Property at issue in this litigation. See Document No. 211, Ex. 1 at 4-6;
c. According to Timothy Bass, a shareholder at the law firm of Greenberg Traurig, the subpoena duces tecum was received on December 14, 2010. See id., Ex. 2 (Bass Decl. ¶ 5);
d. That Greenberg Traurig requested an extension of time to produce responsive document. iStar granted the request as reflected in the following e-mail from Eric Kuwana to Timothy Bass:
Tim,
I left you a voicemail at work, but also will confirm by e-mail that we will give you a reasonable extension of time to respond to our subpoena—especially since you are on vacation right now. Please call or email us after your return, and we can discuss timing.
Id., Ex. 3 (E-mail from Kuwana, Esq. to Bass, Esq. of 12/29/10);
Timothy Bass responded on January 3, 2011.
Thanks, Eric.
It appears that we sent almost everything to Womble Carlyle when they took over the case in May of 2008. The only things we kept were a copy of the correspondence file, a copy of the pleadings file, and our own attorney notes. I'll have the correspondence and pleadings files copied and sent to you by the end of this week. The attorney notes, obviously, are privileged.
*5 We also have a bunch of emails on our backup system. It will take a little time to pull and review those. Once we gather the emails, I'll let you know our anticipated timing for production of those.
If you have any questions, let me know. Thanks again.
Id., Ex. 3 (E-mail from Bass, Esq. to Kuwana, Esq. of 1/3/11);
e. On January 19, 2011, three e-mails were exchanged between Timothy Bass and Eric Kuwana and are listed below in chronological order.
Eric,
As an update, we are in the process of bates-stamping additional responsive documents that I found in my email archives. You should have those at the end of this week, or the beginning of next week.
Id., Ex. 4 (E-mail from Bass, Esq. to Kuwana, Esq. of 1/19/11 at 9:57 AM).
Tim,
Thank you. I assume your production includes emails and communications with any third parties and government entities. Will GT also be providing a privilege log?
Id., Ex. 4 (E-mail from Kuwana, Esq. to Bass, Esq. of 1/19/11 at 10:24 AM).
Yes, all emails and communications with third parties are included. I don't recall seeing any communications with government entities.
The only documents I withheld were: (i) internal emails amongst attorneys/paralegals at Greenberg Traurig regarding litigation strategy; and (ii) emails exchanged between attorneys at Greenberg Traurig and our client contacts at Lennar/U.S. Home regarding litigation strategy. I was not going to provide a privilege log for those emails, as they are patently privileged. If you feel differently, please give me a call to discuss.
Id., Ex. 4 (E-mail from Bass, Esq. to Kuwana, Esq. of 1/19/11 at 10:51 AM);
f. In his declaration Mr. Bass describes the category of documents withheld from production to iStar.
I withheld from production communications between Greenberg Traurig and U.S. Home, as well as communications between Greenberg Traurig and any litigation consultants or other attorneys retained by U.S. Home, such as Matt Wineman, relating to the litigation. In addition, I withheld emails exchanged between Greenberg Traurig's attorneys and paralegals relating to the litigation. Some of the privileged emails also attached litigation budgets and plans, legal research memoranda, draft reports, and draft pleadings, which were likewise withheld from production on the basis of privilege.
Id., Ex. 2 (Bass Decl. ¶ 7);
g. “After being served with the Subpoena, I and my firm promptly proceeded to comply with the terms of the Subpoena. Greenberg Traurig collected and reviewed all of [the] documents in its possession relating to the Bevard property, and conducted an initial review of these documents for privilege. Thereafter, I conducted a second review of these materials, and made the final determination as to what to produce and what to withhold on the basis of privilege.” Id., Ex. 2 (Bass Decl. ¶ 6);
h. “On January 5, 2011 and January 19, 2011, Greenberg Traurig produced 4,199 pages of documents in response to the Subpoena.” Id., Ex. 2 (Bass Decl. ¶ 8);
i. On January 25, 2011 iStar notified counsel for U.S. Home about the documents received from Greenberg Traurig.
We are in receipt of documents from Greenberg Traurig in response to a subpoena issued by our office. Greenberg has produced 4199 pages, broken up into 81 documents. (Electronic documents were produced in three large, unbroken PDFs numbering hundreds of pages each, which is why the # of documents is so small relative to the # of pages.) Please advise if you would like our office to produce the Greenberg production in TIFF format with OCR, and we will arrange for CDs to be delivered to you pursuant to our cost-sharing agreement. Thanks.
*6 Document No. 212, Ex. 3 (E-mail from Rosans, Esq. to Rouleau, Esq.; Ames, Esq.; Folk, Esq. of 1/25/11);
j. On March 11, 2011 U.S. Home's counsel (Womble Carlyle) responded to the January 25, 2011 query, stating in pertinent part, “On a separate note, please let me know the cost associated with the production of documents from Greenberg Traurig, so we can determine whether we want a copy of this production. Thanks.” Id., Ex. 4 (E-mail from Ames, Esq. to Rosans, Esq. of 3/11/11);
k. On March 15, 2011, Womble Carlyle indicated its interest in obtaining a copy of Greenberg Traurig's production. “Also, we would like a copy of Greenberg Trau[r]ig's production and will pay our share of the cost pursuant to the ESI Protocol.” Id., Ex. 5 (E-mail from Ames, Esq. to Rosans, Esq. of 3/15/11);
l. Mr. Bass was unaware of the “inadvertent” disclosure. Counsel from Womble Carlyle informed him about the disclosure.
On April 13, 2011, current litigation counsel for U.S Home, Womble Carlyle Sandridge & Rice, PLLC (“Womble”), learned that certain attorney-client communications and work product documents had been inadvertently produced by Greenberg Traurig and brought this issue to my attention. As a result, I re-reviewed Greenberg Traurig's entire production of documents and identified some additional isolated privileged documents that had been unintentionally and inadvertently produced.
Document No. 211, Ex. 2 (Bass Decl. ¶ 10);
m. Five days later Mr. Bass notified Mr. Kuwana of the inadvertent disclosure, demanding iStar return the documents. See id., Ex. 2 (Bass Decl. ¶ 12); and
n. In the weekly status e-mail to the Court of April 29, 2011, iStar disclosed the following:
By letter dated April 14, 2011, Greenberg Traurig (U.S. Home's former litigation [counsel] in the dismissed “First Action,” not this litigation), notified counsel for iStar that it had inadvertently produced purportedly privileged documents in response to a subpoena and requested their return. Lead litigation counsel for iStar, the recipient of the letter, was out of the country last week and returned this Tuesday. iStar is evaluating Greenberg's request and anticipates responding shortly.
Document No. 212, Ex. 6 (E-mail from Rosans, Esq. to Judge Connelly of 4/29/11);
27. The disputed documents produced by Greenberg Traurig are as follows:
No. 3320: An April 10, 2008 transmittal letter from Matthew Wineman of Rosenberg Martin Greenberg, LLP (“Rosenberg Martin”), [U.S. Home's] pre-litigation transaction counsel;
No. 3755–3757: Emails dated December 19 and 20, 2007 between and among Mr. Wineman of Rosenberg Martin, Mr. Bass of Greenberg Traurig, Robert Jacoby of [U.S. Home], and Reed Rubenstein of Greenberg Traurig. (The top and most recent email does not identify a date or recipients.);
No. 3758: An undated email from Mr. Wineman of Rosenberg Martin, presumably to Mr. Bass of Greenberg Traurig, forwarding a December 14, 2007 email from Mr. Wineman to Mr. Jacoby, which itself included an email from October 7, 2005, from Mr. Jacoby to Sellers' transaction counsel at Reed Smith LLP, James Brennan;
No. 3762–3764: An undated email from Mr. Wineman of Rosenberg Martin, presumably to Mr. Bass of Greenberg Traurig, forwarding email correspondence from December 12, 2007, including Mr. Wineman, Mr. Bass, Mr. Jacoby, Mark Sustana of [U.S. Home], and David Sager of Day Pitney LLP; and
*7 No. 3998–4044: A document containing (i) multiple copies of a Rosenberg Martin memorandum dated December 6, 2007, regarding “Bevard Farms”; (ii) a “Bevard Farms Issue Chart”; and (iii) a Westlaw printout of a case from the Maryland Court of Appeals.
Id. at 8;
28. That in his declaration Timothy Bass identifies the inadvertently produced documents as follows:
a. post-litigation emails between Mr. Bass and Reed Rubenstein, another Greenberg Traurig attorney, and Robert Jacoby of U.S. Home relating to documents gathered in anticipation of litigation;
b. post-litigation emails between Mr. Bass, Mr. Jacoby, Mark Sustana, General Counsel for [U.S. Home], Matt Wineman of Rosenberg Martin Greenberg, LLP and David Sager of Day Pitney LLP, both of whom served as outside counsel to U.S. Home, relating to the motion to transfer Sellers' premature (and now dismissed) suit from the Eastern District of Virginia to this judicial district;
c. a litigation research memorandum from Rosenberg Martin Greenberg, LLP, with full research and citations, dated December 6, 2007, the day Sellers filed suit, and marked “CONFIDENTIAL ATTORNEY CLIENT PRIVILEGE and WORK PRODUCT,” evaluating potential defenses relating thereto;
d. a post-litigation chart drafted by Greenberg Traurig analyzing potential defenses to the litigation;
e. a post-litigation letter from Mr. Wineman to Mr. Bass relating to proposed interrogatory answers; and
f. a post-litigation email between Mr. Wineman and Mr. Jacoby relating to a conflict waiver.
Document No. 211, Ex. 2 (Bass Decl. ¶ 11a-11f);
29. That, having reviewed the documents disclosed by Greenberg Traurig and the descriptions of those documents, the Court notes, with regard to the first document identified by Mr. Bass, he fails to mention that Matt Wineman of Rosenberg Martin Greenberg was not only part of the e-mail chain but also authored at least two e-mails within the e-mail chain;
30. That U.S. Home, as the moving party, has the burden of proving the documents disclosed by its former counsel, Greenberg Traurig, was inadvertently produced. Callan v. Christian Audigier, Inc., 263 F.R.D. 564, 565 (C.D. Cal. 2009); United States v. Sensient Colors, Inc., Civil No. 07-1275 (JHR/JS), 2009 WL 2905474, at *3 (D.N.J. Sept. 9, 2009);
31. That, in accordance with Federal Rule of Evidence 502(b), for this Court to find U.S. Home did not waive its privilege, all three elements of Rule 502(b) must be satisfied. See Conceptus, Inc. v. Hologic, Inc., No. C 09-02280 WHA, 2010 WL 3911943, at *1 (N.D. Cal. Oct. 5, 2010); Felman Prod., Inc. v. Industrial Risk Insurers, Civil Action No. 3:09-0481, 2010 U.S. Dist. LEXIS 74970, at *15 (S.D.W. Va. July 23, 2010);
32. That, with regard to first prong of Rule 502(b)—the disclosure is inadvertent—the Court looks to the pre-production precautions taken by U.S. Home's former counsel. Since Greenberg Traurig did not create a privilege log, the only evidence of the criteria used to identify privileged documents is the January 19, 2011 e-mail from Mr. Bass to Mr. Kuwana, stating in pertinent part,
Yes, all emails and communications with third parties are included.
The only documents I withheld were: (i) internal emails amongst attorneys/paralegals at Greenberg Traurig regarding litigation strategy; and (ii) emails exchanged between attorneys at Greenberg Traurig and our client contacts at Lennar/U.S. Home regarding litigation strategy. I was not going to provide a privilege log for those emails, as they are patently privileged.
*8 Document No. 211, Ex. 4 (E-mail from Bass, Esq. to Kuwana, Esq. of 1/19/11 at 10:51 AM);
33. That the Court finds the e-mails produced by Greenberg Traurig, specifically, Bates No. 3755–3757, Bates No. 3758, Bates No. 3760–3761 and Bates No. 3762–3764, were intentionally disclosed because these e-mails were neither “internal emails amongst attorneys/paralegals at Greenberg Traurig regarding litigation strategy” nor “emails exchanged between attorneys at Greenberg Traurig and our client contacts at Lennar/U.S. Home regarding litigation strategy.” These e-mails included communications to and/or from Matt Wineman, transaction counsel for U.S. Home, among other third parties who were not attorneys/paralegals of Greenberg Traurig or the client contacts at U.S. Home. As Mr. Bass revealed in his January 19, 2011 e-mail, “all emails and communications with third parties are included”;
34. That the Court finds the five page Bevard Farms Issue Chart, Bates No. 4022–4026, an analysis of potential defenses drafted by Greenberg Traurig, was inadvertently disclosed since this document was drafted by attorneys/paralegals at Greenberg Traurig and, consistent with Mr. Bass' January 19, 2011 e-mail, this document, regarding litigation strategy, is the type of document intended to be withheld;
35. That, according to Mr. Bass' post-disclosure affidavit, “I withheld from production communications between Greenberg Traurig and U.S. Home, as well as communications between Greenberg Traurig and any litigation consultants or other attorneys retained by U.S. Home, such as Matt Wineman, relating to the litigation.” Document No. 211, Ex. B (Bass Decl. ¶ 7). Greenberg Traurig did not create a privilege log and therefore the Court lacks evidence of the criteria used to identify privileged documents;
36. That, according to Mr. Bass' post-disclosure affidavit,
Greenberg Traurig collected and reviewed all of [the] documents in its possession relating to the Bevard property, and conducted an initial review of these documents for privilege. Thereafter, I conducted a second review of these materials, and made the final determination as to what to produce and what to withhold on the basis of privilege.
Id., Ex. B (Bass Decl. ¶ 6);
37. That the Court notes that three documents disclosed by Greenberg Traurig, specifically Bates No. 3998–4009, Bates No. 4010–4021 and Bates No. 3320, bear the following heading at the top of the first page: ROSENBERG MARTIN GREENBERG, LLP;
38. That Bates No. 3998–4009 and Bates No. 4010–4021 are identicalcopies of a litigation research memorandum prepared by Rosenberg Martin Greenberg, LLP. On the first page of each document, below the law firm's name and address, is the following: CONFIDENTIAL ATTORNEY CLIENT PRIVILEGE and WORK PRODUCT;
39. That the Court notes, in the January 3, 2011 e-mail from Mr. Bass to Mr. Kuwana, Mr. Bass wrote in pertinent part, “The only things we kept were a copy of the correspondence file, a copy of the pleadings file, and our own attorney notes. I'll have the correspondence and pleadings filed copied and sent to you by the end of this week. The attorney notes, obviously, are privileged.” Id., Ex. 3 (E-mail from Bass, Esq. to Kuwana, Esq. of 1/3/11) (emphasis added);
*9 40. That if Greenberg Traurig purportedly withheld communications between the firm and its client, including communications with any other attorneys retained by U.S. Home, it is inexplicable and in fact, bewildering, how, with a two level review process, Greenberg Traurig overlooked three documents from the firm of Rosenberg Martin Greenberg, LLP, especially when two of the three documents are labeled CONFIDENTIAL ATTORNEY CLIENT PRIVILEGE and WORK PRODUCT;
41. That despite Mr. Bass' post-disclosure affidavit, the Court finds that Greenberg Traurig, consistent with Mr. Bass' January 3, 2011 and January 19, 2011 e-mail, withheld communications generated by Greenberg Traurig.Bates No. 3998–4009, Bates No. 4010–4021 and Bates No. 3320 were not generated by Greenberg Traurig. The Court notes that Bates No. 3998–4009 and Bates No. 4010–4021 are identical, a litigation research memorandum. Despite two levels of review, where the litigation research memorandum was viewed at least four times, it was released. The Court finds the disclosure of Bates No. 3998–4009, Bates No. 4010–4021 and Bates No. 3320 was intentional;
42. That because the Court finds the disclosure of Bates No. 3998–4009 and Bates No. 4010–4021 was intentional, the Westlaw printout of a case from the Maryland Court of Appeals accompanying the litigation research memorandum, Bates No. 4027–4044, is found to be intentionally disclosed;
43. That the second factor pursuant to Federal Rule of Evidence 502(b) is “the holder of the privilege or protection took reasonable steps to prevent disclosure”;
44. That, in light of the evidence cited above, the Court finds U.S. Home failed to take reasonable pre-production precautions to ensure communications related to the litigation and generated by attorneys other than Greenberg Traurig, were not disclosed. This is exemplified by the disclosure of Bates No. 3998–4009 and Bates No. 4010–4021 where the privileged information was self-evident;
45. That similar to Community Bank, U.S. Home took no pre-production steps to prohibit any inadvertent disclosure by its former counsel such as assisting Greenberg Traurig with the production of documents or requesting Greenberg Traurig provide U.S. Home a copy of the documents responsive to iStar's subpoena duces tecum before releasing them to iStar. U.S. Home, through its counsel Womble Carlyle, knew, in advance, that iStar would seek documents from Greenberg Traurig. See Community Bank v. Progressive Cas. Ins. Co., No. 1:08-cv-01443-WTL-JMS, 2010 WL 1435368at, *1, 4 (S.D. Ind. Apr. 8, 2010);
46. That the waiver by U.S. Home applies to the copy of e-mails produced, specifically Bates No. 3755–3757, Bates No. 3758, Bates No. 3760–3761 and Bates No. 3762–3764;
47. That U.S. Home's waiver of the attorney-client privilege applies not only to the specific information disclosed but also to the subject matter of the disclosure. Hawkins, 148 F.3d at 384;
48. That the disclosures in this case involve both communications protected by the attorney-client privilege and the work product privilege. “Like the attorney-client privilege, the work-product privilege may be waived.” Wells v. Liddy, 37 Fed.Appx. 53, 65, 2002 WL 331123 at *9 (4th Cir. Mar. 1, 2002);
49. That the analysis of waiver of the attorney-client privilege and waiver of the work product privilege is not identical.
[T]he waiver of the attorney-client privilege for a communication does not automatically waive whatever work-product immunity that communication may also enjoy, as the two are independent and grounded on different policies. Waiver of the privilege should always be analyzed distinctly from waiver of work product, since the privilege is that of the client and the work product essentially protects the attorney's work and mental impressions from adversaries and third parties even when communicated to the client.
*10 Continental Cas. Co. v. Under Armour, Inc., 537 F. Supp. 761, 769 (D. Md. 2008) (quoting Edna S. Epstein, The Attorney-Client Privilege and the Work-Product Doctrine 608 (4th ed.2001));
50. That “to effect a forfeiture of work product protection by waiver, disclosure must occur in circumstances in which the attorney cannot reasonably expect to limit the future use of the otherwise protected material.” Id. at 772 (quoting Doe v. United States, 662 F.2d 1073, 1081 (4th Cir. 1981) (emphasis removed));
51. That the Court adopts the following analysis concerning waiver of work product privilege:
The notion that disclosure of work product protected material in a manner that creates a substantial risk that it will be received by an adversary waives the protection because it cannot be expected that the future use of the information could be limited is a common sense proposition that has been recognized by other courts and commentators for the simple reason that once an adversary has become aware of the content of the information disclosed it cannot purge it from its mind. This principle has been stated authoritatively as follows: “Work product immunity is waived if the client, the client's lawyer, or another authorized agent of the client: ... (4) discloses the material to third persons in circumstances in which there is a significant likelihood that an adversary or potential adversary in anticipated litigation will obtain it.” Restatement (Third) of the Law Governing Lawyers § 91 (2000). The notion is that failure to take adequate precautions to prevent an adversary from obtaining work product information warrants waiver because “[i]difference to such a consequence indicates that protection of the immunity was not important to the person claiming the protection.” § 91 cmt. b. Further, as long as the disclosure was voluntary, waiver results, even if it was not consensual. § 91, cmt. a (“Most decided cases of waiver involve actions of the attorney or client that are voluntary, but not explicitly consensual.”).
Continental Cas. Co., 537 F. Supp. 2d at 772;
52. That the Court finds Greenberg Traurig waived the work product privilege when it voluntarily disclosed Bates No. 3320 (fact work product), Bates No. 3998–4009 (opinion work product) and Bates No. 4010–4021 (opinion work product). Bates No. 4027–4044 is not opinion work product but was apparently used by counsel in crafting the opinion work product;
53. That the waiver of the work product privilege is limited to the actual information disclosed in the documents. Continental Cas. Co., 537 F. Supp. 2d at 773 (“[T]he Fourth Circuit has recognized that when work product protection has been waived, it is limited to the information actually disclosed, not subject matter waiver”);
54. That the third factor pursuant to Federal Rule of Evidence 502(b) is “the holder promptly took reasonable steps to rectify the error[.]” The Court finds U.S. Home, through its current counsel Womble Carlyle, did take reasonable steps to rectify error upon discovering the error;
55. That, based on the above, the Court finds U.S Home inadvertently disclosed one document, Bates No. 4022–4026; and
*11 56. That, based on the above, the Court finds U.S. Home and Greenberg Traurig waived the privileges with regard to the remaining documents disclosed, specifically, (a) Bates No. 3320, (b) Bates No. 3755–3757, (c) Bates No. 3758, (d) Bates No. 3760–3761, (e) Bates No. 3762–3764, (f) Bates No. 3998–4009, (g) Bates No. 4010–4021 and (h) Bates No. 4027–4044.