Laub v. Horbaczewski
Laub v. Horbaczewski
2021 WL 4691147 (C.D. Cal. 2021)
July 15, 2021
Stevenson, Karen L., United States Magistrate Judge
Summary
The court found that the plaintiffs had not sufficiently supported their claims of privilege for certain text messages between them and other attorneys. The court ordered that the plaintiffs must produce the text messages in unredacted form and subject to the terms of the protective order, as the unredacted portions of the messages did not contain prefatory language that supports the plaintiffs' assertion that the messages describe confidential communications between an attorney and client.
Additional Decisions
Justice Laub
v.
Nicholas Horbaczewski et al
v.
Nicholas Horbaczewski et al
Case No. CV 17-6210-JAK (KS)
United States District Court, C.D. California
Filed July 15, 2021
Counsel
Patrick M. Ryan, Stephen C. Steinberg, Chad DeVeaux, Gabriella A. Wilkins, Joseph John Fraresso, Bartko Zankel Bunzel and Miller APC, San Francisco, CA, for Justice Laub.Kenneth A. Kuwayti, Morrison and Foerster LLP, Paolo Alto, CA, Andrew Ditchfield, Pro Hac Vice, Brian M. Burnovski, Pro Hac Vice, Peter M. Bozzo, Pro Hac Vice, Davis Polk and Wardwell LLP, New York, NY, Nicholas Rylan Fung, Morrison and Foerster LLP, Los Angeles, CA, for Defendant Nicholas Horbaczewski.
Andrew Ditchfield, Pro Hac Vice, Peter M. Bozzo, Pro Hac Vice, Brian M. Burnovski, Pro Hac Vice, Davis Polk and Wardwell LLP, New York, NY, Nicholas Rylan Fung, Morrison and Foerster LLP, Los Angeles, CA, Kenneth A. Kuwayti, Morrison and Foerster LLP, Paolo Alto, CA, for Defendant Drone Racing League, Inc.
Stevenson, Karen L., United States Magistrate Judge
Proceedings: (IN CHAMBERS) ORDER REGARDING PLAINTIFFS' FOURTH SUPPLEMENTAL PRIVILEGE LOG [Dkt. No. 530]
*1 On August 22, 2017, Defendants Nicholas Horbaczewski (“Defendant Horbaczewski”) and Drone Racing League, Inc. (collectively “Defendants”) removed this contract action to federal court. (Dkt. No. 1.) On July 19, 2018, Plaintiffs Justice Laub and Daniel Kanes filed the operative complaint (the “Complaint” or “TAC”). (Dkt. No. 62.) The claims and allegations of the TAC are detailed in prior discovery orders. (See, e.g., Dkt. Nos. 141, 187.)
On October 29, 2020, the Court held a telephonic conference regarding a discovery dispute arising from Plaintiffs' Fourth Amended Privilege Log (“Privilege Log”) in connection with Plaintiffs' September 30, 2020 production of certain text messages. (Dkt. No. 529.) The Court authorized the parties to brief the dispute. (Id.) On November 4, 2020, Defendants filed a Letter Brief (the “Brief”). (Dkt. No. 530.) On November 11, 2020, Plaintiffs filed their Brief in Opposition (the “Opposition”) (Dkt. No. 532-1) under seal as well as a Declaration by Plaintiff Laub (“Laub Decl.”) (Dkt. No. 533-2) and Plaintiffs' Fourth Supplemental Privilege Log (“Ex. A”) (Dkt. No. 532-2). On November 18, 2020, Defendants filed their Reply Brief (the “Reply”) under seal. (Dkt. No. 540-1.) The matter is now fully briefed and ready for decision.
I. Standard of Review
Under Rule 26 of the Federal Rules of Civil Procedure, a party may obtain discovery concerning any nonprivileged matter that is relevant to any party's claim or defense and proportionate to the needs of the case. FED. R. CIV. P. 26(b)(1). “When a party withholds information otherwise discoverable by claiming that the information is privileged or subject to protection as trial-preparation material, 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).
Because the sole basis for federal jurisdiction in this case is diversity jurisdiction, California state law supplies the rule of decision and governs the application of the attorney-client privilege. FED. R. EVID. 501; AdTrader, Inc. v. Google LLC, 405 F. Supp. 3d 862, 864 (N.D. Cal. 2019); In re California Pub. Utilities Comm'n, 892 F.2d 778, 781 (9th Cir. 1989). Under California law, the attorney-client privilege attaches to confidential communications between a client and his attorney during the course of the attorney-client relationship. See CAL. EVID. CODE § 952; Roberts v. City of Palmdale, 5 Cal.4th 363, 371 (1993). The party asserting the privilege bears the initial burden of demonstrating that the communication falls within the privilege. State Farm Fire & Casualty Co. v. Superior Court, 54 Cal. App. 4th 625, 639 (1997).
California law defines a “client” as “a person who, directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer or securing the legal service or advice from him in his professional capacity ....” CAL. EVID. CODE § 951. Thus, the privilege applies to confidential communications during preliminary discussions with an attorney even if the attorney is not ultimately hired. Rosso, Johnson, et al. v. Super. Ct., 191 Cal.App.3d 1514, 1518 (1987). The privilege may also encompass internal client communications that contain a discussion or summary of counsel's legal advice. AdTrader, Inc., 405 F. Supp. 3d at 865; Zurich American Ins. Co. v. Superior Court, 155 Cal. App. 4th 1485, 1502, 1503 (2007). Disclosure of attorney-client communications to a third party does not waive the privilege where the parties have an expectation of confidentiality, a common interest in securing legal advice on the same matter, and the communications are to advance their shared interest. Seahaus La Jolla Owners Assn. v. Super. Ct., 224 Cal. App. 4th 754, 770 (2014).
*2 Once the proponent establishes the foundational facts, i.e., that a communication was made in confidence in the course of the lawyer-client relationship, the opponent of the claim of privilege has the burden to establish that the communication was not confidential or that an exception exists. CAL. EVID. CODE § 917; Costco Wholesale Corp. v. Sup. Ct., 47 Cal.4th 725, 733 (2009).
II. Discussion
On September 30, 2020, Plaintiffs produced their Fourth Supplemental Privilege Log and a revised set of text messages. (Brief at 1.) Plaintiffs asserted privilege in connection with 49 texts, redacted the substance of 35 texts in their entirety on the basis of privilege, and partially redacted the remaining 14 texts. (Brief at 2.) Defendants contend that Plaintiffs have not carried their burden of establishing that the redacted messages—and portions of messages—discuss or contain legal advice made in the course of an attorney-client relationship. (Brief at 2.) In their Reply, Defendants abandoned their challenge to Log Nos. 116, 117, 119, and 120. (Reply at 1.) Accordingly, the Court does not consider the text messages described in those log entries.
A. Log Nos. 100 through 101
On the Privilege Log, Plaintiffs state that Log Nos. 100 through 101 were sent by Plaintiff Laub to Plaintiff Kanes on May 20, 2015, with Log No. 100 regarding “confidential communications with and request for legal advice from attorney Jennifer Post re: protecting IP” and Log No. 101 regarding “confidential request for legal advice from attorney Jennifer Post re: protecting IP.” (Ex. A at 11.)
Defendants assert that the unredacted content of these messages do not support Plaintiffs' assertion that the messages concern legal advice and/or confidential communications with attorney Jennifer Post. (Brief at 4; see also Ex. A at 11.) In their Opposition, Plaintiffs point to the message before Log Nos. 100-01 as lending credence to Plaintiffs' description of the messages at issue and their confidential nature. (Opposition at 3.) In their Reply, Defendants state that the preceding text from Plaintiff Kanes does not refer to attorney Jennifer Post and shows only that the Plaintiffs “were trying to come up with ideas themselves”—not that they were discussing the advice of counsel. (Reply at 1.)
With respect to Log No. 100, the Court agrees with Plaintiffs. The unredacted portions of this message plainly refer to attorney Jennifer Post and contemplate an attorney-client relationship.
However, with respect to Log No. 101, the Court agrees with Defendants. The unredacted portions of this message do not refer to statements made by or to an attorney or a relationship between either plaintiff with an attorney. Further, the line preceding Log No. 100 makes no reference to statements made by or to an attorney or a professional relationship between either plaintiff and an attorney. Accordingly, IT IS ORDERED that, within seven (7) days of the date of this Order, Plaintiffs shall produce to Defendants the text message described in Log No. 101 in unredacted form and subject to the terms of the protective order.
B. Log Nos. 105 through 115
On the Privilege Log, Plaintiffs state that Log Nos. 105 through 108 and 111 through 113 were sent by Plaintiff Kanes to Plaintiff Laub on June 20, 2015 and concern “confidential communications with and legal advice from attorney Jennifer Post from contemporaneous emails and phone call re: potential investment in DRL.” (Ex. A at 12-14.) Plaintiffs state that Log Nos. 109 and 114 through 115 were sent by Plaintiff Laub to Plaintiff Kanes on June 20, 2015 and concern “confidential communications with and legal advice from attorney Jennifer Post from contemporaneous emails and phone call re: potential investment in DRL.” (Ex. A at 13-15.) Finally, Plaintiffs state that Log No. 110 is a text conversation between Plaintiffs that occurred on June 20, 2015. (Ex. A at 13-14.) The first text in that conversation was sent by Plaintiff Laub to Plaintiff Kanes and is redacted in full. (Id.)
*3 Defendants contend that Plaintiffs provide only “vague and conclusory” descriptions of the messages at issue and therefore do not establish that the messages describe a confidential communication made during a consultation with a lawyer in his or her professional capacity. (See Brief at 3.) In the Opposition, Plaintiffs point out that the text messages preceding Log Nos. 105 through 110 described communications with attorney Jennifer Post and ended with a question related to those communications. (Opposition at 3.) Accordingly, Plaintiffs state that Log Nos. 105 through 110 recite communications with Ms. Post and Log Nos. 111 through 115 contain information regarding strategy and communications between Plaintiffs and Ms. Post. (Opposition at 3.) Defendants state in their Reply that they find Plaintiffs arguments unconvincing because they offer “no basis” to conclude that the redacted texts “consist entirely of legal advice.” (Reply at 1-2.)
The Court agrees with Plaintiffs. Plaintiffs have provided ample evidence in support of their claim that the text messages, and the portions of text messages at issue concern legal advice from Ms. Post and Plaintiffs' confidential discussions with her in her professional capacity.
C. Log Nos. 118 and 121
On the Privilege Log, Plaintiffs state that Log No. 118 was sent by Plaintiff Laub to Plaintiff Kanes on August 13, 2015 and concerns “confidential communications with and legal advice from J. Post re: potential investment in and draft agreement from DRL.” (Ex. A at 16.) Plaintiffs state that Log No. 121 was sent by Plaintiff Kanes to Plaintiff Laub on August 17, 2015 and concerns “confidential communications with and request for legal advice from J. Post re: draft agreement from DRL.” (Ex. A at 16.)
Defendants contend that Plaintiffs have failed to establish that these messages describe communications made during a consultation with a lawyer in his or her professional capacity. (Brief at 3.) In their Opposition, Plaintiffs assert that Log Nos. 118 and 121 are fully redacted because, like Log Nos 105 through 115, they are both responding to Plaintiffs' earlier texts about what Ms. Post said. (Opposition at 3.) Defendants insist in their Reply that the fact that Plaintiffs were responding to a text concerning what Ms. Post said does not establish that Plaintiffs' responses disclosed any legal advice. (Reply at 2.)
The Court agrees with Plaintiffs. As stated above, Plaintiffs provided ample evidence that the redacted portions of the text messages in Log Nos. 105 through 115 concerned legal advice from Ms. Post. The text messages in Log. No. 118 and 121 are close in time to those earlier messages, a message in between Log. No. 118 and 121—namely, Log No. 120—directly references Ms. Post, and Plaintiffs have asserted that Log Nos. 118 and 121 are a continuation of their earlier conversation about communications with Ms. Post. Accordingly, the Court finds that Plaintiffs sufficiently supported their claim of privilege.
D. Log Nos. 123 though 125
On the Privilege Log, Plaintiffs state that Log Nos. 123 through 125 were sent from Plaintiff Laub to Plaintiff Kanes on November 23, 2015 and concern “confidential communications with and legal advice from attorney Sam Herting re draft agreements from DRL.” (Ex. A at 16-17.) Defendants contend that none of these texts appear on their face to reflect actual legal advice from Mr. Herting and the mere fact that Plaintiffs were discussing a subject matter on which one of them had communicated with an attorney does not establish that the specific texts at issue are privileged communications. (Brief at 2-3 n.1.) Plaintiffs state in the Opposition that these texts are fully redacted because they contain information from confidential communications with Mr. Herting in their entirety, and, for support, they point to the unredacted portion of the text message described in Log No. 122 in which Plaintiff Laub refers to advice from a new lawyer. (Opposition at 3.) In their Reply, Defendants reiterate their contention that Plaintiffs' claims of privilege are insufficiently specific and the fact that a text mentions a lawyer does not necessarily mean that the text in fact contains privileged communication. (Reply at 2.) The Court finds that Plaintiffs have sufficiently supported their claims of privilege by establishing that Log Nos. 123 through 125 flow from the text message described in Log No. 122, in which Plaintiff Laub expressly described the advice he received from a lawyer.
E. Log Nos. 126 through 129 (re: Barrett Cohn)
*4 On the Privilege Log, Plaintiffs state that Log Nos. 126 through 128 were sent by Plaintiff Laub to Plaintiff Kanes on January 27 and January 29, 2016 and concern “confidential communications with and request for legal advice from attorney Barrett Cohn re: potential dispute with Defendants.” (Ex. A at 17.) Plaintiffs indicate that Log No. 129 was sent by Plaintiff Laub to Plaintiff Kanes on January 29, 2016 and the unredacted portions of the message concern “confidential communications with and legal advice from Barrett Cohn re: potential dispute with Defendants.” (Ex. A at 17.)
Defendants argue that Plaintiffs fail to meet their burden with respect to these four text messages because they have not established that Mr. Cohn, a longtime friend of Plaintiff Laub, was either a lawyer within the meaning of California law at the time of the relevant communications or that Plaintiff Laub was speaking to him in a professional capacity so as to be deemed a “client” of Mr. Cohn. (Brief at 5.) Defendants explain that Mr. Cohn was not authorized to practice law at the time of the relevant communications and had not been employed as an attorney since December 2003. (Brief at 5.) Defendants add that Plaintiff Laub's subjective belief that Mr. Cohn was authorized to practice law is insufficient (Brief at 5) and, further, Plaintiffs have supplied no evidence to support the inference that Plaintiff Laub was not merely “picking the brain of a friend.” (Brief at 6.)
In their Opposition, Plaintiffs state that Plaintiff Laub reasonably believed that Mr. Cohn was authorized to practice law when he sought Mr. Cohn's advice. (Opposition at 4.) Plaintiffs state that Plaintiff Laub met Mr. Cohn in the mid-2000s and always believed he was authorized to practice law and this belief was reasonable because Mr. Cohn told Plaintiff Laub that he was an attorney, never said otherwise, and acted as a legal advisor to Plaintiff Laub many times in the past. (Opposition at 4-5.) Plaintiff Laub contacted Mr. Cohn to obtain legal advice “in his professional capacity” in January 2016 and did not know that Mr. Cohn was inactive with the California bar at the time. (Opposition at 5.)
In their Reply, Defendants argue that Plaintiffs have failed to submit any evidence from Mr. Cohn to support the inference that he held himself out as an attorney to Plaintiff Laub in or around January 2016, and Defendants further contend that, in the absence of such evidence, the Court should decline to infer that Mr. Cohn engaged in the unauthorized practice of law in violation of his ethical obligations. (Reply at 3.)
The Court finds Defendants' position compelling. In People v. Gionis, 9 Cal. 4th 1196, (1995), the California Supreme Court determined that the attorney-client privilege does not protect communications made in consultation with an attorney “in his capacity as a friend.” Gionis, 9 Cal. 4th at 1212. Plaintiffs suggest that Gionis is inapplicable because, in that case, the attorney expressly informed the defendant that he would not represent the defendant before the defendant made the incriminating statements. (Opposition at 5.) However, Mr. Cohn also informed Plaintiff Laub that he would not represent him and referred Plaintiff Laub to another attorney. (Laub Decl., ¶ 4.)
Plaintiffs nevertheless insist that, at the time of the consultation, Plaintiff Laub had an objectively reasonable belief that Mr. Cohn was authorized to practice law. Even if true, however, this argument is not sufficient to support the claim of privilege. To establish that the communications are privileged, Plaintiffs must show that Plaintiff Laub not only reasonably believed he was talking to a licensed lawyer—he must also have reasonably believed, under the totality of the circumstances, that he was consulting with Mr. Cohn in his professional capacity as a licensed lawyer. Cf. Strasbourger Pearson Tulcin Wolff Inc. v. Wiz Tech., Inc., 69 Cal. App. 4th 1399, 1404 (1999) (“primary attention should be given to whether the totality of the circumstances, including the parties' conduct, implies an agreement”); Bird v. PSC Holdings I, LLC, No. 12-CV-1528 W (NLS), 2014 WL 1389327, at *3 (S.D. Cal. Apr. 8, 2014) (court must consider “indirect evidence and contextual considerations” in determining whether it would have been reasonable for the person to have inferred that he was a client of the lawyer).
*5 In his Declaration, Plaintiff Laub states that, “[d]uring the years that [he has] known Mr. Cohn, he has advised [Plaintiff Laub] on multiple business ventures, as a legal advisor, including negotiating deals for companies..., reviewing legal documents, and providing legal advice.” (Laub Decl., ¶ 3.) However, the fact that Plaintiff Laub engaged with Mr. Cohn in his professional capacity on prior occasions does not establish that it was reasonable under the circumstances for him to believe that he was doing so again in this specific instance. Without more, asking a long-time friend and occasional legal advisor for his impressions of a particular issue or dispute does not rise to the level of consulting with that friend in his professional capacity. Finally, as Defendants point out, “a plaintiff cannot unilaterally establish an attorney-client relationship .... Instead, it is the intent and conduct of [all of] the parties that controls the question as to whether an attorney-client relationship has been created.” Zenith Ins. Co. v. O'Connor, 148 Cal. App. 4th 998, 1010 (2007).
In light of the foregoing, and viewing the circumstances in their totality, the evidence weighs against a finding that Plaintiff Laub had a reasonable belief that he was consulting with Mr. Cohn in his professional capacity. First, Mr. Cohn would have violated his ethical obligations if he provided legal advice to Plaintiff Laub while not authorized to practice law. Second, Mr. Cohn—in accordance with those ethical considerations—declined to represent Plaintiff in this matter and referred Plaintiff to another lawyer. (Laub Decl., ¶ 4.) Third, there is no countervailing evidence before the Court to support the inference that, despite the foregoing, Mr. Cohn held himself out to Plaintiff Laub as available for a consultation in his professional capacity as a lawyer on this matter. Accordingly, the Court finds that Plaintiffs have failed to adequately support their claim of privilege for the four text messages describing communications between Plaintiff Laub and Barrett Cohn. Therefore, IT IS ORDERED that, within seven (7) days of the date of this Order, Plaintiffs shall produce to Defendants the text messages described in Log Nos. 126 through 129 in unredacted form and subject to the terms of the protective order.
F. Log Nos. 131 through 139
On the Privilege Log, Plaintiffs state that Log Nos. 131 through 139 are text messages sent between the Plaintiffs on January 30, 2016 and concern “confidential legal advice from attorney, likely Tao/Tim Li, re: potential dispute with Defendants.” (Ex. A at 17-18.) Defendants contend that Plaintiffs' description is insufficiently specific to support their claim of privilege and the withholding of these texts is particularly egregious because Plaintiffs cannot identify with certainty the attorney whose confidential communications are at issue. (Brief at 3.) In their Opposition, Plaintiffs respond that Log Nos. 134 through 139 follow from a conversation beginning in Log No. 130 in which Plaintiff Laub described advice received from another lawyer. (Opposition at 4.) Defendants insist in the Reply that Plaintiff Laub cannot support a claim of attorney client privilege for communications with an attorney whose first name he cannot remember. (Reply at 2.)
The Court agrees with Plaintiffs. Plaintiff Laub plainly consulted with a number of lawyers, and his inability to remember two of the letters of the first name of one of these lawyers does not preclude him having had—and from now protecting as privileged—confidential communications made during those consultations. The test for attorney-client privilege is not whether the party claiming privilege can correctly remember the name of the lawyer with whom he consulted, but, rather, whether the messages describe a confidential communication made during a consultation with a lawyer in his or her professional capacity. With respect to Log Nos. 130 through 139, Plaintiffs have established that they do. As Plaintiffs point out, the text conversation described in Log No. 130 begins with Plaintiff Laub describing advice received from another lawyer and includes the two plaintiffs discussing legal goals and strategy. This is sufficiently specific to support Plaintiffs' claim of privilege for the text messages concerning Plaintiff Laub's communications with Mr. Li.
G. Log Nos. 140 through 146 and 148
*6 On the Privilege Log, Plaintiffs state that Log Nos. 140 through 143 are text messages sent between the Plaintiffs on February 26, 2016 and concern “confidential communications with and legal advice from attorneys, likely including but not limited to Joey Tran, re: potential dispute with Defendants.” (Ex. A at 20.) Plaintiffs state that Log Nos. 144 through 146 and Log. No. 148 are text messages sent by Plaintiff Laub to Plaintiff Kanes on March 2, 2016 concerning “confidential communications with and legal advice from attorneys, likely including but not limited to Frank Cialone, re: potential dispute with Defendants.” (Ex. A at 21.)
Defendants contend that these messages cannot be privileged because Plaintiffs cannot identify with certainty which lawyers' communications are at issue. (Brief at 4.) Defendants also point to the unredacted portions of the messages as being inconsistent with the assertion that the messages describe confidential communications. (Brief at 4-5.) For example, the unredacted portion of Log No. 143 reads “Well these lawyers are,” which Defendants contends suggests that the redacted portion describes the lawyers' actions—not their communications. (Brief at 4.) Similarly, the unredacted portion of Log No. 146 states “Just send out good energy around 11 AM I really want to close the deal with this lawyer guy is such a badass and I need to...”. (Brief at 5.) Defendants contend that, “telling Mr. Kanes what he ‘needs to’ do is not a basis to redact the text as privileged, even if it relates to the potential retention of an attorney.” (Brief at 5.)
In their Opposition, Plaintiffs state that the “surrounding messages show[ ] that the redacted messages relate to calls with these lawyers.” (Opposition at 4.) They also specifically point to Log No. 148, where the preceding text describes what Plaintiff Laub told attorney Frank Cialone. (Opposition at 4.) Defendants respond in the Reply that asserting that the messages “ ‘relate to’ calls with lawyers” does not meet the standard of showing that the texts discuss or contain legal advice or confidential communications. (Reply at 2.)
Plaintiffs' assertions that the text messages contain confidential communications with and legal advice from attorneys generally is insufficient to establish that an attorney-client relationship, existed and that the purportedly privileged content of the message(s) concerns a confidential communication made within the scope of that relationship. Further undermining Plaintiff's claims is the fact that the unredacted portions of the messages — “I hear you”, “I need to”, “these lawyers are”, “those lawyers have not worked out yet”—do not contain prefatory language that supports Plaintiffs' assertion that the messages describe confidential communications between an attorney and client. (See, e.g., Ex. A at 20, Log Nos. 140, 141, 143, 146.)
The only text message of this batch for which Plaintiffs have supported their claim of privilege is Log No. 148 because, as they point out, it is preceded by—and appears to be a continuation of—a text message in which Plaintiff Laub expressly describes a communication with attorney Frank Cialone. However, with regards to the other text messages, Log Nos. 140 through 146, Plaintiffs have failed to adequately support their claim of privilege and the messages must be produced. Therefore, IT IS ORDERED that, within seven (7) days of the date of this Order, Plaintiffs shall produce to Defendants the text messages described in Log Nos. 140 through 146 in unredacted form and subject to the terms of the protective order.
III. Conclusion and Order
For the reasons stated above, IT IS HEREBY ORDERED that, within seven (7) days of the date of this Order, Plaintiffs shall produce to Defendants, in unredacted form and subject to the terms of the protective order, the text messages described in the following Log Numbers in Exhibit A to Plaintiffs' Opposition: 101; 126 through 129; and 140 through 146.
*7 IT IS SO ORDERED.
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