*1 Pursuant to the Court's October 11, 2022 Order Appointing Special Master, attached hereto as Exhibit. A., the Special Master makes the following Report and Recommendation that the Plaintiff's Motion to Compel Discovery is granted in part and denied in part. A proposed Order consistent with this Report and Recommendation is attached. A proposed Protective Order is also attached.

I. The Instant Dispute Before the Special Master

Before the Special Master are discovery issues concerning documents Plaintiff, Southeastern Transportation Authority (“SEPTA”) requested be produced by Robert Olender, d/b/a Roddy, Inc. the real estate broker (“the Broker”)[1] retained by Defendant, Drummond Decatur and State Properties, LLC (“DDS”), in connection with the building located at 10551 Decatur Road, Philadelphia, PA 19154 (“the Building”) that is the subject of this litigation. SEPTA served a subpoena on the Broker on February 9, 2022.

DDS has compiled a privilege log Bates numbered 1 through 4560. DDS later revised the log pursuant to the Special Master's request, though no logged items were eliminated (the “Roddy privilege log”[2]), listing documents DDS claims are protected from discovery pursuant to the attorney client privilege and/or the work product doctrine. The Roddy privilege log also contains documents DDS has designated “confidential commercial information” or “non-responsive.” Additionally, some of the documents identified in the log are in redacted form. This Court directed the Special Master to conduct an in camera review of the documents listed on the Roddy privilege log and prepare this Report and Recommendation as to the applicability of the listed bases for withholding discovery of those documents.

II. Background and Procedural History as Relevant to the Instant Dispute

This matter involves the Building that SEPTA leases from DDS. SEPTA claims that DDS misrepresented the condition of the Building before the lease was entered into, for which SEPTA now seeks damages. During discovery, SEPTA sought documents from the Broker, and DDS turned over redacted documents and the Roddy Privilege log. On September 9, 2022, SEPTA filed Plaintiff's Motion to Compel Production of the documents listed on the privilege log (“Plaintiff's Brief”)[3]. DDS filed Defendant's Opposition to Plaintiff's Motion to Compel on September 20, 2022 (“Defendant's Brief”)[4]. These Motions address the discovery dispute presently at issue.

On October 11, 2022, the Court issued its Order appointing Amy Kurland, Esq. as Special Master. The Special Master held several conferences with the parties, requested that Defendant supplement the privilege log with information relating to the authors and recipients of all entries and list the bases for withholding documents. Additional conferences were held to resolve the status of discovery regarding documents in the Roddy Privilege log designated “confidential” or “non-responsive.”

*2 The Special Master conducted an in camera review of all documents listed on the Roddy privilege log and having carefully reviewed those documents, concluded that no documents are privileged, and one document should be withheld pursuant to the work product doctrine. Regarding the documents designated “confidential,” the Special Master recommends that the Court enter a Protective Order. Finally, the parties have agreed that the documents designated “non-responsive” will not be produced. These recommendations to the Court are discussed in this report.

III. Choice of Law

This is a diversity action, and federal courts presiding over diversity actions must utilize state law to determine the existence and scope of attorney client privilege law. Fed. R. Evid. 501 and 1101. BouSamra v. Excela Health, 653 Pa. 365, 210 A.3d 967 (2019); Rhone–Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851, 861 (3d Cir. 1994), Sandoz Inc. v. Lannett Co., 570 F. Supp. 3d 258, 264 (E.D. Pa. 2021).

The work product doctrine, in federal diversity cases, is governed by Fed. R. Civ. P. 26(b)(3). United Coal Cos. v. Powell Construction Co., 839 F.2d 958, 966 (3d Cir.1988) (“[u]nlike the attorney client privilege, the work product privilege is governed, even in diversity cases, by a uniform federal standard embodied in FED. R. CIV. P. 26(b)(3).” Coregis Ins. Co. v. L. Offs. of Carole F. Kafrissen, P.C., 57 F. App'x 58, 60 (3d Cir. 2003).

IV. Legal Standards - The Attorney Client Privilege

In its Motion to Compel Discovery, SEPTA argues that the documents listed in the Roddy Privilege log are not protected either by attorney client privilege or the work product doctrine, and that merely classifying documents as confidential communications or non-responsive are insufficient bases to withhold discovery. Plaintiff's Brief at p.10. SEPTA also argues that the Broker was not an indispensable agent to DDS's counsel and therefore all documents listed on the privilege log are discoverable. Id. at p. 5-8. Defendant counters these arguments in DDS' Opposition to Plaintiff's Motion to Compel and adds that producing the requested documents would cause grievous harm to DDS beyond this litigation. Defendant's Brief at 2-8.

The purpose of the attorney client privilege is to protect and promote candor in the relationship between client and attorney thereby promoting the public interest in the administration of justice. Upjohn v. US, 449 US 383, 389 (1981); Utesch v. Lannett Co. Civil Action No. 16-5932 *8 (E.D. Pa. 2020). Accordingly, communications between a client and attorney are presumptively protected. Moore v. Bray, 10 Pa. 519, 524-5 (1849). Facts, however, are not protected from disclosure. Vasoli v. Yards Brewing Co., Civil Action 21-2066 *2 (E.D. Pa. 2021). The overriding public interest in not obstructing the truth finding process requires that the attorney client privilege be narrowly construed, and, applied only to protect those communications necessary to obtain legal advice and which would not have been made but for the protection the privilege affords.[5] Vasoli, 2021WL 504920, at *2 (citing Westinghouse Electric Corp. v. Republic of Philippines, 951 F.2d 1414, 1423 (3d Cir. 1991)). See also, EFG Bank AG v. The Lincoln Nat'l Life Ins Co. 593 F. Supp. 3d 225, 229 (E.D. Pa. 2022 (quoting Westinghouse Elec. Republic of 951 F.2d at 1429); In re Chevron Corp., 633 F.3d 153, 165 (3d Cir. 2011).

*3 Under Pennsylvania law, to qualify for protection pursuant to the attorney client privilege, there must be a communication made in confidence between privileged persons for the purpose of obtaining or providing legal assistance for the client. Restatement (Third) Law Governing Lawyers § 68 (American Law Institute). Privileged persons include the client, the attorney(s) and “any of their agents that help facilitate attorney-client communication or the legal representation.” Utesch, Civil Action No. 16-5932, at *8 (quoting In re Teleglobe, 493 F.3d at 360(quoting Upjohn, 449 U.S. at 389, Sandoz Inc., 570 F. Supp. 3d at 258 (quoting, Gilliard v. AIG Ins. Co.,609 Pa. 65, 15 A. 3d. 44, 52n.8 (2011) (the attorney client privilege protects communications between the attorney and a corporation's agents or employees authorized to act on behalf of the corporation.) )

The attorney client privilege extends to communications between third parties and the attorney and client where it is shown that the third party is indispensable or a necessary means to facilitate the lawyer's ability to provide legal advice. BouSamra, 210 A.3d 967, 987 (Pa. 2019). The attorney client privilege is waived when a confidential communication is shared with a third party whose presence is neither indispensable nor facilitates a lawyer's ability to give legal advice. Id. at 986. The communication at issue in BouSamra was an email thread among outside counsel, the defendant and a third party - a public relations firm hired by defendant to assist in managing anticipated publicity regarding the plaintiff's work for the defendant. The defendant's attorney sent an email containing legal advice concerning anticipated publicity to his client. The client then forwarded the email to his contact at the public relations firm who subsequently forwarded it to his employees working on the defendant's matter. The Court held that the attorney client privilege could be properly applied to third parties when the third party assists the attorney in giving legal advice to the client. Id. at 983-984 (quotations and citations omitted). Finding that the third party did not affect counsel's ability to give legal advice and did not improve the comprehension between the lawyer and client, which was necessary for the lawyer to furnish legal advice, the defendant was required to produce the communication at issue. Id. at 985-986. See also Sandoz Inc., 570 F. Supp. at 265.

The BouSamra court distinguished its facts from other situations where third parties offered specialized knowledge or expertise that was necessary or highly useful for the lawyer to formulate legal advice. See United States v. Kovel, 296 F.2d 918 (2d Cir. 1961) (third party was an accountant who was present and participated while the client related his complicated and relevant tax story to the lawyer), Commonwealth v. Noll, 443 Pa. Super. 602 (1995) (communications among an accident reconstruction expert, the attorney and the client were adjudged privileged). The BouSamra court also noted that the privilege would apply to a third party interpreter, present to explain foreign terms or concepts to a lawyer, without which explanations the lawyer would find it exceedingly difficult, or impossible to provide legal advice. Id at 985-986.[6] Recently, referencing “the BouSamra test,” the Court in Sandoz Inc. v. Lannett Co. found that a third party consultant was “an active participant,” by providing his work product and soliciting legal advice from the client's attorney. Thus, the active engagement between the third party and the attorney concerning legal advice tilted in favor of applying the privilege to the third party communications. Sandoz, 570 F. Supp. at 265-66.

V. Attorney Client Privilege Claims

*4 Both DDS and SEPTA recognize that attorney client privilege extends to third parties under certain circumstances. Plaintiff's Brief at p.6; Defendant's Brief at p.2. The key question is whether Roddy is a third party to whom the privilege extends.[7] Both parties cite BouSamra as prevailing authority for application of the attorney client privilege to communication among a client, its attorney and a third party hired by the client.

DDS asserts that attorney client privilege protects from discovery over 143 entries in the Roddy privilege log.[8] DDS avers that Roddy, the real estate broker, hired by the management company, which was hired by DDS, in connection with the property, enabled the giving of legal counsel by relaying proposals and information to DDS's counsel, and regularly to the management company and/or Counsel, and providing insight about prospective tenants and buyers for the property without which DDS' counsel would have had “a substantially harder task to provide effective, informed advice to DDS.” Defendant's Brief at p.2. SEPTA contends that the information provided by Roddy was neither indispensable nor did it facilitate DDS's counsel's ability to give legal advice. Plaintiff's Brief at 5 et. seq.

DDS argues the BouSamra opinion only supplements and does not replace the pre-existing test for applying the privilege by requiring that privileged third party communications either are indispensable or must facilitate the giving of legal advice.[9] Defendant's Brief at pp.2-4. Arguing that privilege applies to their facts, DDS argues that the documents in the Roddy Privilege Log should be protected because Roddy actively participated in negotiations for the client and was necessary for effective consultation between client and lawyer. Defendant's Brief at p.5.

While the attorney client privilege is essential to promote candid conversations between attorneys and clients, it must be construed narrowly, to avoid using it as a shield to prevent discovery of relevant information. Here, the Roddy privilege log is extensive and overly broad and seeks to shield a broad swathe of discovery under an overly large umbrella. The Special Master also notes at the outset that all documents on the Privilege Log were in Roddy's possession, not the possession of the client, DDS, or its attorney.

Many documents identified on the Roddy privilege log do not involve an attorney and are not protected by the attorney client privilege. For example, the first entry on the Roddy Log, Bates numbered 1-222, are Roddy's activity reports summarizing events relating to the property. There are no recipients noted on the reports and no indication that the documents constitute confidential communications between the attorney and client. In addition, the fact that Roddy prepared this activity log, describing emails with the property manager and the attorney, is contrary to the notion that the communications were intended to remain confidential. These documents do not satisfy even the first prong of the privilege requirements that the communication is made in confidence between privileged persons, Restatement (Third) Law Governing Lawyers § 68 (American Law Institute), and therefore are not protected from discovery. Similarly, Bates numbered documents 873-908 and 953-963 are email communications between the Broker and a prospective lessee or purchaser of the property. The communications are among non-attorneys and are not for the purposes of legal advice. Since no attorney is present, the email chains do not satisfy the requirement that the communication be made to an attorney or their agent and are thus not protected.

*5 DDS also seeks to protect email communications between the Broker and other parties, where an attorney is merely copied. While an attorney is copied on the communications, the purpose is not for legal advice and there is no dispensing of legal advice. For example, Bates numbered document 3381 is a communication between the Broker and the property manager attaching a sprinkler report. The attorney is copied. Document number 2914 is a communication between other parties confirming a meeting with SEPTA where the attorney is copied. Document 2708 is a communication between a potential lessee and the Broker confirming business terms. Again, the attorney is merely copied. Thus, these communications are not protected.

The Roddy log also contains email correspondence such as scheduling meetings, scheduling inspections and requesting updates. DDS has provided no explanation as to how these documents could be privileged, especially considering some of the emails are from the opposing party. For example, Bates numbered document 2181 is an email from SEPTA to DDS's attorney asking for a schedule for repairs, which is then forwarded to the Broker. Bates numbered document 2179 is an email from SEPTA noting that a fire alarm inspection has been scheduled, which is forwarded by the attorney to the property manager asking who will be available.

The Roddy log contains leases between parties that have not been marked by an attorney. For example, documents Bates numbered 3060 to 3107 constitute a lease with no redlines or markings by anyone. DDS has provided no explanation for why these materials should be privileged.

The Roddy Privilege Log contains communications between the Broker and the attorney that are purely factual in nature. For example, in documents Bates numbered 414 through 416, a Roddy employee sends the attorney a diagram of the space to be leased and the commencement date for the lease in response to the attorney's request for that information. Facts are not protected, discussed supra. Accordingly, documents on the privilege log that seek or contain purely factual information must be disclosed.

As discussed supra, where a third party facilitates the attorney's ability to give legal advice, communications between the third party, the client and his attorney may be protected pursuant to the attorney client privilege. However, where there is no finding that the third party was either indispensable or facilitated the giving of legal advice, the privilege is waived. Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d at 1427 (voluntary disclosure to a third party waives the attorney-client privilege).

The Special Master finds that the Broker in this situation has not offered specialized knowledge or expertise like the accountant in Kovel who related his complicated and relevant tax information to the lawyer, the accident reconstruction expert in Noll, or a third party interpreter, present to explain foreign terms or concepts to a lawyer, a situation noted in BouSamra. Nor was the Broker here an active participant like the consultant in Sandoz, who provided his work product, solicited legal advice to which the attorney responded with comments relating to legal strategy and which the consultant incorporated. Rather, the Broker's job was to find a lessee or buyer for the property. His role in this case was in large part to obtain facts and pass them on to either the property manager or the attorney, which the attorney then used to draft a lease in the ordinary course of business. The Broker had no role in any legal decisions or strategy and there was no active engagement between the third party and the attorney concerning legal advice.[10]

*6 Thus, for the documents identified in the log as subject to the attorney client privilege and which have been disclosed to or included Roddy, the attorney client privilege has been waived. Unless those documents are found to be attorney work product, they must be produced.

VI. Legal Standard - Work Product Doctrine

The purpose of the work product doctrine is to prevent the attorney's work from disclosure to an adversary so that his work cannot be used to his or his client's disadvantage. EFG BNK AG, Cayman Branch, et al., 593 F. Supp. 3d 225, 231 (E.D. Pa. 2022).[11] Distinct from the attorney client privilege, the work product doctrine targets exclusively work prepared in anticipation of litigation by an attorney or his agent. (emphasis added) Utesch v. Lannett Co., Civil Action No. 16-5932, at *12. The party invoking the work product doctrine has the burden of proving it applies. Fed. R. Civ. P. 26(b)(5).

The Third Circuit test for determining whether a document was prepared in anticipation of litigation is “whether in light of the nature of the document and the factual situation in the particular case, the nature of the document can fairly be said to have been prepared or obtained because of the prospect of litigation.” Utesch, at *12 (quoting United States v. Rockwell Int'l, 897 F.2d 1255, 1266 (3rd Cir. 1990).[12] An objectively reasonable standard applies to evaluate a lawyer's anticipation of litigation. Id. The Court clarified that attorney work product prepared in anticipation of some litigation, not exclusively in anticipation of the litigation at issue, is sufficient for the protection to attach. Id. at 12-13.[13] In contrast, the doctrine does not protect documents prepared “in the ordinary course of business, or pursuant to public requirements unrelated to litigation, or for other non-litigation purposes.” Martin v. Bally's Park Place Hotel & Casino, 983 F.2d 1252, 1260 (3d Cir. 1993) (cited with approval in Serrano v. Chesapeake Appalachia, LLC, 298 F.R.D. 271, 277 (W.D.Pa., 2014).

Material otherwise protected by the work product doctrine can be discovered when a requesting party demonstrates both substantial need for such material, and inability to obtain the material or its equivalent elsewhere without undue hardship. Fed. R. Civ. P. 26(b)(3)(A)(ii). The substantial need evaluation is satisfied when the information requested is within the exclusive control of the party from whom discovery is sought, regardless of whether such information might also be obtained from that party through other means. In re Sunrise Sec. Litig., 130 F.R.D. 560, 569 (E.D. Pa. 1989) decision clarified on denial of reconsideration, 109 B.R. 658 (E.D. Pa. 1990) (requesting party is not required to prove that information cannot be discovered by any method other than document production to establish “compelling need.”).

*7 Upon a showing of compelling need, in the Order for discovery of work product, “(the court must) protect against disclosure of mental impressions, conclusions, opinion or legal theories of an attorney or other representatives of a party concerning the litigation.” Fed. R. Civ. P 26(b)(3)(B). Such “core” or “opinion” work product receives greater protection than ordinary work product and is discoverable only in exceptional circumstances. In re Sunrise Sec. Litig., 130 F.R.D. at 569 (emphasizing that the interest in maintaining the privacy of core work product has trumped preventing discovery of work product containing slight factual content) (citation omitted). Utesch v. Lannett Co., Civil Action No. 16-5932, at *9.

VII. Work Product Claims

DDS asserts that the work product doctrine protects from discovery over 167 entries in the Roddy privilege log. The work product analysis is different from the attorney client analysis as we need not consider the third party's s role. Rather, for those documents prepared by DDS's attorney, the consideration is whether those documents were prepared in anticipation of some litigation and whether they contain core material - attorney thoughts, mental impressions, conclusions, opinions, or legal theories. Additionally, if SEPTA has demonstrated a substantial need for this material and cannot obtain the material or its equivalent elsewhere without incurring undue hardship, the work product doctrine does not apply. The Special Master has reviewed the documents claimed to be work product with this view.

DDS claims that documents not created by their attorneys are protected by the work product doctrine. Under certain circumstances, courts have held that the work product doctrine protects documents created by parties other than an attorney. In United States v. Nobles, 422 U.S. 225, 238 (1975), where an investigative report was prepared for an attorney, the Supreme Court recognized that attorneys often must rely on the assistance of investigators and other agents in the compilation of materials in preparation for trial. The Court held that “it is therefore necessary that the doctrine protect material prepared by agents for the attorney as well as those prepared by the attorney himself”. Id. at 239. See also Serrano, 298 F.R.D. 271, 277 (W.D.Pa., 2014) (investigative file had been “prepared by or on behalf of attorneys in anticipation of litigation.” Id. at p.278 (quoting Westinghouse, 951 F.2d at 1428). However, here, many of the items claimed to be work product are email chains between the Broker, the property manager and the attorney. For example, documents Bates numbered 541to 543 are email chains including draft leases and noting the changes. Document Bates numbered 2171 is an email between the Broker and property manager in which the attorney is copied and which discusses the alarm system.

Accordingly, the Special Master finds that all communications in the log identified as protected work product, that were not created by an attorney or on behalf of an attorney, are not the proper subject of the work product doctrine and must be produced. The Special Master has noted those Bates numbered documents on its Amended Privilege Log.

The Roddy log contains numerous draft leases that are redlined presumably by DDS's attorney. In many cases, the Special Master is unable to confirm that the redlined copies are the work of the attorney. DDS claims these draft leases are attorney work product. The key issue regarding these drafts is whether they were prepared in reasonable anticipation of litigation. As stated, materials prepared in the ordinary course of business are not protected. See Martin v. Bally's Park Place Hotel & Casino, Fed. R. Civ. P. 26(b)(3), advisory committee's note, 1970 Amendment (“Materials assembled in the ordinary course of business, or pursuant to public requirements unrelated to litigation, or for other nonlitigation purposes are not under the qualified immunity provided by this subdivision.”). “The burden of demonstrating that a document is protected as work-product rests with the party asserting the doctrine.” Utesch, Civil Action No. 16-5932, at *9 citing Conoco Inc. v. U.S. Dep't of Justice, 687 F.2d 724, 730 (3d Cir. 1982).

*8 In Borgia v. State Farm Mut. Auto. Ins. Co., CIVIL ACTION No. 14-3149 (E.D. Pa. Sep. 3, 2014, J. Sanchez), the court evaluated the work product doctrine in the context of an insurance company's evaluation of a claim. The Court found that because insurance companies are required to evaluate claims made by their insureds in the ordinary course of their business, “discovery disputes involving an insurance company's claims file often present problems for the parties.” Garvey v. Nat'l Grange Mut. Ins. Co., 167 F.R.D. 391, 394 (E.D. Pa. 1996) (citation omitted). As numerous courts have recognized, “[a]n insurance company cannot reasonably argue that the entirety of its claims files are accumulated in anticipation of litigation when it has a duty to investigate, evaluate[,] and make a decision with respect to claims made on it by its insureds.” Shaffer v. State Farm Mut. Auto. Ins. Co., No. 13-1837, 2014 WL 931101, at *2 (M.D. Pa. Mar. 10, 2014) (citation omitted); Robertson v. Allstate Ins. Co., No. 98-4909, 1999 WL 179754, at *3 (E.D. Pa. Mar. 10, 1999) (same).

The references to the client's “case” or “trial preparation” emphasize the requirement that the documents be prepared in anticipation of litigation to be protected by the work product doctrine. In United States v. Nobles, the Supreme Court held that the doctrine “shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case.” United States v. Nobles, 422 U.S. at 238. Included within this category are trial preparation documents that reflect the fruits of the attorney's endeavors, any compendium of evidence prepared by the attorney and any of the attorney's mental impressions, opinions or theories. Id. at pp. 236-39. (emphasis added). See also Endeavor Energy Res. LP. v. Gatto & Reitz, LLC, 2:13cv542 (W.D. Pa. Mar. 31, 2017).

While it is possible that at some point normal business activity may shift to anticipation of litigation, it is necessary to determine when DDS reasonably anticipated that issues with SEPTA would result in litigation. A party's anticipation of litigation is objectively reasonable if “there existed an identifiable specific claim or impending litigation when the materials were prepared.” Borgia, CIVIL ACTION No. 14-3149 *3 citing Montgomery Cnty. v. Microvote Corp., 175 F.3d 296, 305 (3d Cir. 1999) (Greenberg, J., concurring) (citation and internal quotation marks omitted); see also Martin, 983 F.2d at 1260. The burden is on DDS to establish that there was an identifiable specific claim or impending litigation.

SEPTA filed the instant complaint on September 23, 2021, and although litigation was likely anticipated prior to that date, there is no indication that at the time these draft leases were prepared, DDS expected that litigation was imminent. DDS has produced no evidence to that effect. Attorneys do not draft leases to further litigation or create conflict. On the contrary, a carefully drafted lease is one that anticipates and sets forth the parties' obligations and is designed to avoid conflict and subsequent litigation.

The Special Master concludes that although some of these lease drafts may have been redlined by an attorney, they were not prepared in anticipation of litigation and are not the proper subject of the work product doctrine. These documents must be produced.

DDS has listed one document in the Roddy privilege log that was produced by an attorney in reasonably objective anticipation of litigation and is suitable for protection pursuant to the work product doctrine. Document Bates numbered 2378-2379 contains communications with a tax attorney relating to issues with the property. The Special Master has noted in its Amended Privilege log, that this Bates numbered document should be protected from disclosure under the work product doctrine.

*9 The purpose of the work product doctrine is to protect an attorney's thought process and legal strategy from opponents who could use the information to a client's disadvantage and this purpose must drive the analysis. Thus, when an attorney's work product is disclosed to an adversary or an opposing party, the protection under the work product doctrine is waived. Disclosure of attorney work product to an adversary is clearly inconsistent with the purpose of the work product doctrine. United States v. Nobles, 422 U.S. at 239–40.

Here, for example, documents Bates numbered 342-347, which contain email exchanges between the Broker and DDS's attorney, are identified in the log as work product. However, that email chain is forwarded to a lessee – Mike Flynn of the Flynn Company – who is on the opposing side of the lease agreement. Even if these email exchanges qualified as work product, which they likely do not, DDS waived any protection under the doctrine by forwarding the email chain to Mr. Flynn.

VIII. Confidential Commercial Information

DDS claims that disclosure of the documents in the Roddy privilege log for which Confidential Commercial information has been listed as the basis for privilege, would cause grievous harm to DDS beyond this litigation. The right to privacy is not an unqualified one; it must be balanced against the competing interest in not obstructing the truth finding process. See Vasoli, 2021 WL 5045920 at *2; In re T.R., 557 Pa. 99, 106, 731 A.2d 1276, 1280 (1999). Pursuant to Fed. R. Civ. P. 26(b), SEPTA is entitled to obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case. SEPTA seeks information about the Building, the property upon which it sits and the related documents and communication, which are the subject of this litigation. DDS claims that some documents identified as Confidential Commercial Information relate to DDS's negotiations for other buildings and other portions of the Building not leased by SEPTA. The Special Master finds that SEPTA is entitled to this discovery to the extent that it does not regard privileged matter.

The Special Master also is cognizant of DDS's claim that disclosure of the communications identified as confidential commercial information may cause grievous harm to DDS and has worked with the parties to address those concerns and strike a balance between DDS's right to privacy and SEPTA's right to discovery. Although DDS has not filed a Motion for a Protective Order, the Special Master is charged with resolving the discovery issue as to these documents. Following several conferences with the Special Master, as well as discovery conditions and a proposed Confidentiality Stipulation suggested by the Special Master, the parties have been unable to agree to terms for disclosure of these documents that protect DDS's concerns.

The Special Master has proposed a Protective Order to address the parties' concerns, which is attached to this report as Exhibit G. Under the proposed Protective Order, DDS will mark documents CONFIDENTIAL and produce the non-privileged documents in the privilege log designated confidential commercial information to SEPTA's attorneys for their exclusive use in this litigation, and those documents will be destroyed as soon as possible and at the latest, following resolution of the litigation.

IX. Non-Responsive Documents

The Special Master completed an in camera review of the documents in the Roddy Privilege log designated non-responsive and also reviewed the discovery requests. The Special Master found that these documents concerned properties that are not the subject of this litigation. Pursuant to an agreement of the parties, in reliance upon the proffer by DDS' attorney that such documents are not relevant to this litigation, the parties agreed that these documents will not be produced.

X. Recommendation and Proposed Orders

*10 The Special Master recommends that the plaintiff's Motion to Compel Discovery be granted in part and denied in part consistent with the determinations of the Special Master set forth in this Report. The Special Master conducted an in camera review of all documents listed on the Roddy privilege log and having carefully reviewed those documents, concluded that no documents are privileged, and one document should be withheld pursuant to the work product doctrine. Regarding the documents designated “confidential,” the Special Master recommends that the Court enter a Protective Order. Finally, the parties have agreed that the documents designated “non-responsive” will not be produced.

The Special Master has also set forth reasonings and recommendations in an Amended Roddy Privilege Log, which is attached here as Exhibit. E.

Based on the reasoning in this Report and Recommendation, two Proposed Orders are attached as Exhibit F - an Order granting in part and denying in part the Motion to Compel Discovery, and Exhibit G - a Protective Order.

Respectfully submitted,