*1 This breach of contract action was commenced on June 8, 2016, by plaintiff Chartwell Therapeutics Licensing LLC (“Chartwell”), alleging claims against defendant Citron Pharma LLC (“Citron”), in connection with an agreement to market and sell certain Doxcycline (“Doxy”) Hyclate pharmaceutical tablets and capsules (the “Product”). (Compl.[1] ¶ 5). On September 4, 2019, this Court authorized Citron to file an Amended Answer and Counterclaim, raising claims that the Term Sheet entered into between the parties had been modified to include Doxy Suspension, a liquid form of the drug, and that Chartwell had breached that agreement.[2]

Currently before this Court is Citron's motion to compel the production of documents and responses to interrogatories relating to Doxy Suspension. Also before the Court is Citron's motion to claw back four emails that were inadvertently produced to Chartwell and which Citron claims are privileged.

A. Citron's Document Requests

1) Request Nos. 1, 2, 7, 9, 10, 11, 12, 13, 14, 15

Citron seeks to compel Chartwell to produce documents relating to Chartwell's sales of Doxy Suspension through its third party distributors, including Chartwell's contracts with “anyone” (No. 1); profit share statements and communications with third-party distributors (No. 2); any payments to Chartwell relating to Doxy Suspension (No. 7); sales orders (No. 9); sales invoice register (No. 10); invoices (No. 11); purchase orders (No. 12); bills of lading (No. 13); documents reflecting gross sales (No. 14); and documents reflecting deductions from gross sales claimed by any third-party distributors (No. 15). (Def.’s 10/29/19 Ltr.[3] at 1, Ex. A).

Chartwell objects to these requests as overly broad, unduly burdensome and not proportional to the needs of the case. (Pl.’s 11/5/19 Ltr.[4] at 2-3). Plaintiff takes the position that there was no enforceable agreement between the parties to distribute Doxy Suspension, but that even if there was, Citron's breach of the Term Sheet in November 2014 demonstrated that if Citron suffered any losses, those losses were limited to one purchase order for 4,500 units of Doxy Suspension. (Id. at 2). To the extent that Citron seeks discovery from Chartwell relating to the sale of Doxy Suspension to third-parties between the period July 2014 and the present, Chartwell contends that the requests are “wholly unreasonable, overly broad, and seek[ ] documents that are irrelevant and not proportional to the needs of this case.” (Id. at 3).

Chartwell has agreed to produce a record showing sales to the two parties to whom Chartwell sold Doxy Suspension – Cipla Limited (“Cipla”) and Harris Pharmaceutical (“Harris”) – for the period from July 2014 through the date the action was commenced, June 16, 2016. (Id. at 3). Plaintiff relies on an email from Brandon Casey of Citron, dated November 20, 2014, in which he indicated that the terms of the agreement between the parties “still need to be worked out;” Chartwell argues that this supports the position that no formal agreement had been reached. (Id. at 3).

*2 Citron argues that because the parties entered into an exclusive dealing arrangement, whereby Citron was to be Chartwell's exclusive distributor of Doxy Suspension, Citron is entitled to be made whole for Chartwell's breach, and can measure damages based on all of Chartwell's profits from the date of the breach to the present. (Def.’s 10/29/19 Ltr. at 2) (citing Care Travel Co. v. Pan Am. World Airways, Inc., 944 F.2d 983, 994-95 (2d Cir. 1991)). Citron further notes that in Chartwell's own requests for discovery, Chartwell has asked for documents relating to Citron's attempted sales to third-parties relating to Doxy Suspension. (Id. at 3). Finally, Citron contends that any concerns raised by Chartwell as to confidentiality should be allayed by the existence of the confidentiality order that is already in place in the litigation. (Id. at 3-4).

With respect to the time frame for the Doxy Suspension discovery, Citron has not provided the Court with any factual basis on which to conclude that if there was a modification to the Term Sheet with respect to Doxy Suspension, the parties intended the exclusive deal to extend in perpetuity. Indeed, based on the email provided by Chartwell, it appears that Citron's own representative recognized that there was no final agreement as of November 8, 2014. Although Citron asserts that the emails do not show that an agreement regarding Doxy Suspension had been terminated, and Citron produced evidence in the form of an affidavit from Vimal Kavuru, indicating that an agreement had been reached (Def.’s Reply[5] at 2), the Court finds no basis for the argument that the agreement, if any, was intended to extend to the present day. Thus, the Court concludes that the relevant time period for production of documents relating to Doxy Suspension is the approximately two-year period from July 2014 until suit was commenced in June 2016 (the “relevant period”).

To the extent that Citron is seeking the contracts entered into between Chartwell and other third parties, the Court agrees that the specific terms of those agreements are not relevant to the ultimate purpose for which Citron is seeking documents from Chartwell – namely, to establish Citron's damages in the event that Citron is able to prove that it had an exclusive deal to sell Doxy Suspension. Similarly, to the extent that Citron is seeking sales and audit documentation from Harris and Cipla showing the terms of their sales to their customers, the Court agrees that the discovery is not proportional to the needs of the case. As Chartwell points out, these entities are larger than Citron; Citron was only given the right to sell Doxy Suspension to three identified customers and therefore the arrangements each of the companies had with their customers were not comparable and could not be used to prove Citron's lost profits. (See Pl.’s 11/5/19 Ltr. at 5).

However, the Court agrees that it is not sufficient for Chartwell to provide only a single document summarizing its sales to Cipla and Harris. Instead, the Court directs Chartwell to produce for the relevant period: 1) any communications between Chartwell and Cipla and Chartwell and Harris relating to the negotiation for the purchase and sale of Doxy Suspension; and 2) any invoices, sales orders and payments received by Chartwell during the relevant period from either Cipla or Harris relating to the sale of Doxy Suspension.

2) Request Nos. 3, 4, 5, and 6

Citron has also requested the production of documents reflecting negotiations between Chartwell and any of its suppliers or contemplated suppliers (No. 3); communications between Citron and Chartwell regarding Doxy Suspension (No. 4); all communications between Chartwell and anyone regarding Doxy Suspension (No. 5); and all internal communications at Chartwell regarding Doxy Suspension (No. 6). (Def.’s 10/29/19 Ltr. at 4). According to Citron, Chartwell has agreed to produce responsive documents insofar as they reflect communications between Citron and Chartwell, but it has objected to producing documents in response to Request Nos. 3, 5, and 6.

*3 Citron's requests are not limited in time and are overly broad – “all non-privileged communications between Chartwell and anyone regarding Doxy Suspension,” and “all internal communications” relating to Doxy Suspension. (Id. at 4, Ex. A (emphasis added)). The Court has already directed Chartwell to produce communications with Cipla and Harris during the relevant period. To the extent that there are “internal” communications relating to the sale of Doxy Suspension to Cipla, Harris or Citron, plaintiff is Ordered to produce them for the relevant period.

3) Request No. 16

In this request, Citron seeks discovery of any documents reflecting FDA requirements relating to the sale of Doxy Suspension. (Id. at 4). This request was prompted by Chartwell's proposed defense that Citron would not have been able to sell Doxy Suspension because it failed to fulfill certain regulatory requirements which Chartwell claims were Citron's responsibility. (Id.) Citron argues that, based on this proposed defense, any regulatory requirements that had to be fulfilled by Chartwell's third-party distributors that were actually fulfilled by Chartwell would be relevant to this defense. (Id.)

The Court again finds the request for all communications relating to FDA requirements to be overly broad and not proportional to the needs of the case. The Court limits the request to any documents reflecting agreements between Chartwell and Cipla and Chartwell and Harris to deal with regulatory issues. While the Court recognizes that the agreements reached to deal with these issues may have been completely different from an agreement that was reached with Citron – if any – the arrangements reached with these two distributors may shed some light on the defense being raised by Chartwell.

B. Citron's Interrogatories

Citron seeks to compel responses to its Interrogatory Nos. 1 and 2. Interrogatory No. 1 seeks the identity of all distributors through whom Chartwell sold Doxy Suspension and the time periods during which they sold Doxy Suspension, (Id. at 4). Chartwell has indicated that it sold to Cipla and Harris but refuses to provide information beyond the relevant time period, which this Court has defined as July 2014 to the date of the filing of the Complaint. Interrogatory No. 2 seeks information relating to any audits performed of third-party distributors and whether any discrepancies were discovered. (Id. at 5). Citron argues that if Chartwell felt the need to audit its distributors, Citron is entitled to discovery of the results of these audits to determine if the profits were adjusted because this would impact on Citron's claimed lost profits. (Id.)

As to the first interrogatory, this Court has already determined the relevant time period for discovery. Since it would not be proportional to require Chartwell to produce documents relating to the sale of Doxy Suspension in the three years since the filing of the Complaint, the Court finds that the information sought in Interrogatory 1 beyond the relevant time period is not proportional to the needs of the case. As for the audits of the non-party distributors, the Court finds this to be a pure fishing expedition; whether other distributors were audited, why and what the findings of those audits were have minimal relevance to Citron's claims in this case. Citron's requests to compel responses to these interrogatories is denied.

C. Citron's Clawback Motion and Motion to Seal

Citron has raised a separate issue in its letter of October 29, 2019. It seeks to enforce the clawback provision of the Confidentiality Order with respect to four emails that it claims were inadvertently produced and which Chartwell has refused to destroy. (Def.’s 10/29/19 Ltr. at 5). In a separate letter, also dated October 29, 2019, Citron asks the Court for permission to file the subject emails under seal. (Def.’s 2d 10/29/19 Ltr.[6] at 1, ECF No. 193).

*4 Citron claims that all four emails are protected by the attorney client privilege. (Def.’s 10/29/19 Ltr. at 5). Three of the emails – CIT102894, CIT102870, and CIT102871 – are emails send in June 2016 between a Citron senior executive and Edward Neugeboren seeking input relating to a proposed email to be sent to Chartwell. Chartwell contends that the emails were sent to Neugeboren at an email address under the Casper Pharma LLC domain name at a time when Neugeboren was not an employee of Citron but was acting merely as a broker and fact witness. (Pl.’s 11/5/19 Ltr. at 6) (citing Neugeboren's testimony that he was simply “ ‘working with’ Citron as a broker”). Even though Citron claims Neugeboren was a consultant at the time, plaintiff claims that he was hired by Citron, not Citron's counsel. (Id.) Indeed, according to plaintiff, Mr. Neugeboren never indicated during his deposition that he was a “representative” or a “consultant” when he communicated with Chartwell as a broker for Citron. (Id. at 7).

“[T]he attorney-client privilege is one of the ‘oldest recognized privileges for confidential communication[,]’ ” intended to “ ‘encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and the administration of justice.’ ” Collins v. City of New York, No. 11 CV 766, 2012 WL 3011028, at *3 (E.D.N.Y. July 23, 2012) (quoting Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998)) (internal citations omitted).

The attorney-client privilege protects communications “(1) between a client and his or her attorney (2) that are intended to be, and in fact were, kept confidential (3) for the purpose of obtaining or providing legal assistance.” Brennan Ctr. for justice at N.Y. Univ. Sch. of Law v. U.S. Dep't of Justice, 697 F.3d 184, 207 (2d Cir. 2012) (internal quotations and citation omitted). “The privilege is not limited to communications made in the context of litigation or even a specific dispute, but extends to all situations in which an attorney's counsel is sought on a legal matter.” Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 862 (D.C. Cir. 1980). Thus, the privilege is triggered when a client, including a corporation, seeks legal advice from its counsel. See In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1037 (2d Cir. 1984). Moreover, in Upjohn Co. v. United States, 449 U.S. 383, 390 (1981), the Supreme Court noted that “the privilege exists to protect not only the giving of professional advice to those who can act on it but also the giving of information to the lawyer to enable him to give sound and informed advice.” Thus, the privilege extends to include communications between employees of a corporation and corporate counsel. See id.

In general, the client waives the privilege when the protected communication is disclosed to a third party. Bank of Am., N.A. v. Terra Nova Ins. Co., 211 F. Supp. 2d 493, 496 (S.D.N.Y. 2002). Unless the protected communication is made before a third party who is assisting the lawyer in representing the client for the purpose of obtaining legal advice, “communications made between a defendant and counsel in the known presence of a third party are not privileged.” McNamee v. Clemens, No. 09 CV 1647, 2013 WL 6572899, at *5 (E.D.N.Y. Sept. 18, 2013) (quoting Allied Irish Banks, P.L.C. v. Bank of Am., N.A., 252 F.R.D. 163, 168 (S.D.N.Y. 2008)). “The burden of establishing the existence of an attorney-client privilege or work product protection rests with the party asserting the privilege/protection.” OneBeacon Ins. Co. v. Forman Int'l, Ltd., No. 04 CV 2271, 2006 WL 3771010, at *4 (S.D.N.Y. Dec. 15, 2006) (citing In re Grand Jury Proceedings, 219 F.3d 175, 182 (2d Cir. 2000)). The party resisting disclosure carries “the heavy burden of establishing its applicability, Chevron Corp. v. Salazar, 275 F.R.D. 437, 444 (S.D.N.Y. 2011), which is “not discharged by mere conclusory or ipse dixit assertions.” In re Grand Jury Subpoena Dated Jan. 4, 1984, 750 F.2d 223, 224-25 (2d Cir. 1984); see also S.E.C. v. NIR Grp., LLC, 283 F.R.D. 127, 131 (E.D.N.Y. 2012).

*5 Having reviewed the parties’ submissions and the subject emails, the Court finds that the three emails involving Mr. Neugeboren were not covered by the attorney-client privilege. Citron has failed to carry its burden of demonstrating that disclosure to Neugeboren, a non-attorney, non-employee of Citron, did not constitute a waiver of any privilege that may have attached.

As for the final email – CIT103003 – Citron argues that this email from Ira Baeringer of Citron to Patrick Papalia of Archer & Greiner seeking legal advice is clearly privileged. (Def.’s 10/29/19 Ltr. at 5). Although Chartwell argues that the email was not privileged because the email was sent to Citron's COO Amaya Ashok, at his Cronus Pharma email address rather than his Citron email address, in a footnote to its November 5, 2019 letter, Chartwell consents to destroy all copies of the email but disputes, without evidence, that the document is subject to privilege. (Pl.’s 11/5/19 Ltr. at 1, note 1). Thus, the Court orders Chartwell to either return CIT103003 or submit an affidavit that it has been destroyed in accordance with the Confidentiality Order.

Finally, with respect to Citron's motion to seal all four emails which were submitted for the Court's review in connection with this motion, the Court grants the request to file them under seal.

The Clerk is directed to send copies of this Memorandum and Order to the parties either electronically through the Electronic Case Filing (ECF) system or by mail.

SO ORDERED.