-POR Brighton v. Dynasty Designs LLC, et al, No. 3:2006cv01588 - Document 217 (S.D. Cal. 2008)
Court Description: ORDER granting in part and denying in part defendant's request for production of certain documents identified on Brighton's 08/04/2008 Privilege Log. Discovery due by 9/26/2008. Signed by Magistrate Judge Louisa S Porter on 09/11/08. (ag)
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-POR Brighton v. Dynasty Designs LLC, et al Doc. 217 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 BRIGHTON COLLECTIBLES, INC., a California Corporation, 14 15 06cv1588-H (POR) Plaintiff, 12 13 Civil No. ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S REQUEST FOR PRODUCTION OF CERTAIN DOCUMENTS IDENTIFIED ON BRIGHTON’S AUGUST 4, 2008 PRIVILEGE LOG v. DYNASTY DESIGNS, LLC, a Missouri Limited Liability Company, and DOES 1 through 10, inclusive, Defendant. 16 17 On July 21, 2008, the Court ordered Plaintiff Brighton Collectibles, Inc. to make a due 18 diligent search of all Project Heart documents, including files and computers maintained by Mr. 19 Kohl, Ms. Young and Mr. Moran, for documents responsive to Dynasty’s Request for Production of 20 Documents Numbers 15, 16, 17, 18, and 64. The Court ordered Brighton to prepare and produce a 21 revised privilege log to the Court for in camera review if a question remained as to whether a 22 document was subject to the order. Pursuant to the Court’s July 21, 2008 Order, Brighton identified 23 13 documents on its August 4, 2008 Privilege Log as confidential. Dynasty asserts certain 24 documents identified on Brighton’s privilege log should be produced. 25 I. 26 APPLICABLE LAW 27 Federal Rule of Civil Procedure 26(b)(1) provides for discovery of "any non privileged 28 matter that is relevant to any party's claim or defense." There is no federal privilege preventing the -1- 06cv1588-H (POR) Dockets.Justia.com 1 discovery of settlement agreements and related documents. See JZ Buckingham Invest. LLC v. 2 United States, 78 Fed.Cl. 15, 22 (Fed.Cl.2007); see also Matsushita Elec. Indus. Co., Ltd. v. 3 Mediatek, Inc., 2007 WL 963975, *2-4 (N.D.Cal.2007); Board of Trustees of Leland Stanford Junior 4 University v. Tyco Intern. Ltd., 2008 WL 1023458, *2-3 (C.D. Cal., 2008). Therefore, discovery of 5 settlement negotiations can be based on the reasonable belief that it may produce information that 6 can be brought into evidence independent of the settlement context. Morse/Diesel, Inc. v. Trinity 7 Industries, Inc., 142 F.R.D. 80 (S.D.N.Y. 1992). 8 9 Federal courts generally recognize a right to privacy that can be raised in response to discovery requests. Johnson by Johnson v. Thompson, 971 F.2d 1487, 1497 (10th Cir. 1992). 10 Unlike privilege, however, the right to privacy is not an absolute bar to discovery. Rather, courts 11 balance the need for information against the claimed privacy right. Ragge v. MCA/Universal 12 Studios, 165 F.R.D. 601, 604 (C.D. Cal. 1995). 13 The attorney-client privilege covers communication between an attorney and a client made 14 primarily for the purpose of obtaining legal advice or services from the attorney. Fisher v. United 15 States, 425 U.S. 391, 403 (1976). There is no privilege for corporate counsel who is giving, or 16 corporate counsel employees who are seeking, predominantly business advice as opposed to legal 17 advice. ABB Kent-Taylor, Inc. v. Stallings and Co., 172 F.R.D. 53, 57-58 (W.D.N.Y 1996). 18 The attorney work product doctrine only applies to "material obtained and prepared by an 19 attorney or the attorney's agent in anticipation of litigation or preparation for trial.” Verizon 20 California Inc. v. Ronald Katz Technology Licensing, L.P., 266 F. Supp. 2d 1144, 1147 (C.D. Cal. 21 2003). The Ninth Circuit states,"a document should be deemed prepared in anticipation of 22 litigation...if in light of the nature of the document and the factual situation of the particular case, the 23 document can be fairly said to have been prepared or obtained because of the prospect of litigation." 24 In re Grand Jury Subpoena, 357 F3d 900, 910 (9th Cir. 2004). 25 Privilege will only apply with respect to auditors if the proponent of the protection can show 26 the audit was conducted only with an eye to preparing for prospective litigation, rather than for some 27 subsidiary purpose. See United States v. Chevron Texaco Corp., 241 F. Supp. 2d 1065, 1090 (N.D. 28 Cal. 2002). -2- 06cv1588-H (POR) 1 II. 2 DISCUSSION 3 A. 4 ITEM 1 Item 1 is an e-mail regarding Bear Financial Accounting Questions. It includes a spreadsheet 5 with questions from one bidder for Brighton and Brighton's responses. Brighton asserts three 6 grounds for denying production of this document to Dynasty: (1) settlement communications are 7 privileged and protected from discovery by third parties; (2) disclosing these agreements would 8 infringe on the privacy rights of the other parties to each agreement; and (3) the documents have no 9 relevance to the present action between Brighton and Dynasty. 10 After reviewing Item 1, it is evident a majority of the information discussed therein is 11 relevant to Dynasty's defense against Brighton's claim it suffered more than $14 million in lost 12 profits and harm to its brand goodwill. Thus, the relevant information in Item 1 comes within Rule 13 26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to any party's 14 claim or defense." Further, Brighton shared Item 1 with investment banker Peter J. Solomon 15 (“Solomon”) as part of the Project Heart auction due diligence process. Third party privacy rights 16 shall be addressed pursuant to the parties’ Stipulated Protective Order. 17 Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall 18 produce Item 1 in redacted form. Brighton shall redact column J, lines 139-140 because these 19 answers are not relevant to the issue of Brighton’s damages in this case.. 20 B. ITEM 2 Item 2 is an email from a Brighton attorney to Brighton's CFO, Mr. Moran. Brighton 21 22 opposes production of this communication between a Brighton attorney and a Brighton officer 23 because it is (1) attorney-client communication, (2) attorney work product, and (3) irrelevant. Upon review of Item 2, it is apparent the document was neither drafted primarily for the 24 25 purpose of obtaining legal advice or services from the attorney nor prepared in anticipation of 26 litigation. Thus, Item 2 is not protected by either the attorney-client privilege or the attorney-work 27 product doctrine. 28 // -3- 06cv1588-H (POR) 1 Nonetheless, Item 2 is irrelevant to the instant case as it neither relates to Brighton's claim against 2 Dynasty nor Dynasty's defense. Based thereon, IT IS HEREBY ORDERED: Dynasty's request for 3 production of Item 2 is denied. 4 C. 5 ITEM 3 Item 3 is an email from Brighton's counsel to Solomon including a summary of all IP 6 litigation and pending litigation to which Brighton is a party. Brighton asserts four grounds for 7 denying production of Item 3 to Dynasty: (1) settlement communications are privileged and 8 protected from discovery by third parties; (2) disclosing these agreements would infringe on the 9 privacy rights of the other parties to each agreement; (3) the documents have no relevance to the 10 present action between Brighton and Dynasty, and (4) these documents are attorney work product. 11 After reviewing Item 3, it is evident The IP settlements discussed therein are relevant to 12 Dynasty's defense against Brighton's claims. Item 3 was not drafted in anticipation of litigation and 13 therefore is not protected by the attorney work product doctrine. Thus, the IP settlements come 14 within Rule 26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to 15 any party's claim or defense." Further, Brighton voluntarily shared Item 3 with Solomon. Third 16 party privacy rights shall be addressed pursuant to the parties’ Stipulated Protective Order. Based 17 thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce Item 3. 18 D. 19 ITEM 4 Item 4, an e-mail drafted by Brighton's counsel and sent to Solomon, includes a summary of 20 all litigation that does not involve intellectual property. Brighton asserts four grounds for denying 21 production of this document to Dynasty: (1) settlement communications are privileged and protected 22 from discovery by third parties; (2) disclosing these agreements would infringe on the privacy rights 23 of the other parties to each agreement; (3) the documents have no relevance to the present action 24 between Brighton and Dynasty, and (4) these documents are attorney work product. 25 After reviewing Item 4, there is no evidence of information relating to IP litigation in which 26 Brighton is a party. However, information in Item 4 may be probative of issues bearing on 27 Brighton’s claims and Dynasty’s defenses. Item 4 was not drafted in anticipation of litigation and 28 therefore is not protected by the attorney work product doctrine. Thus, Item 4 comes within Rule -4- 06cv1588-H (POR) 1 26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to any party's 2 claim or defense." Further, Brighton voluntarily shared Item 4 with Solomon. Third party privacy 3 rights shall be addressed pursuant to the parties’ Stipulated Protective Order. 4 Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall 5 produce Item 4 in redacted form. Brighton shall produce Item 4. 6 E. 7 ITEM 5 Item 5, an e-mail drafted by Brighton's counsel and sent to Solomon, relates to a settlement 8 with the Texas Attorney General. On further review of the document, Brighton has determined this 9 agreement provides that its terms "are public and may be disclosed and discussed by the parties." 10 Therefore, as to this document, Brighton withdraws its assertion of privilege and will produce a copy 11 to Dynasty. Pursuant to Brighton's withdrawal of its assertion of privilege as to Item 5, IT IS 12 HEREBY ORDERED: Brighton shall produce a copy of Item 5 to Dynasty. 13 F. 14 ITEM 6 Item 6, an e-mail drafted by Brighton's counsel and sent to Solomon, includes a summary of 15 IP and non-IP litigation. Brighton asserts four grounds for denying production of this document to 16 Dynasty: (1) settlement communications are privileged and protected from discovery by third 17 parties; (2) disclosing these agreements would infringe on the privacy rights of the other parties to 18 each agreement; (3) the documents have no relevance to the present action between Brighton and 19 Dynasty, and (4) these documents are attorney work product. 20 After reviewing Item 6, it is evident there is information therein relating to pending IP 21 litigation. Item 6 was not drafted in anticipation of litigation and therefore is not protected by the 22 attorney work product doctrine. Thus, Item 6 comes within Rule 26(b)(1), which provides for 23 discovery of "any non-privileged matter that is relevant to any party's claim or defense." Further, 24 Brighton voluntarily shared Item 6 with Solomon. Third party privacy rights shall be addressed 25 pursuant to the parties’ Stipulated Protective Order. 26 Based on the reasoning above and Dynasty’s specific request for production of documents 27 solely relating to the settlement of IP litigation, IT IS HEREBY ORDERED: Brighton shall produce 28 Item 6 in redacted form. Brighton shall produce Item 6 to the extent it refers to IP litigation. -5- 06cv1588-H (POR) 1 G. ITEM 7 2 Item 7, an e-mail drafted by Brighton's counsel and sent to Solomon, includes a set of letters 3 from Brighton's counsel to its auditors. Brighton asserts five grounds for denying production of this 4 document to Dynasty: (1) settlement communications are privileged and protected from discovery 5 by third parties; (2) disclosing these agreements would infringe on the privacy rights of the other 6 parties to each agreement; (3) the documents have no relevance to the present action between 7 Brighton and Dynasty, (4) the documents are protected by the attorney-client privilege, and (5) these 8 documents are attorney work product. 9 Upon review of Item 7, it is apparent the document was neither drafted primarily for the 10 purpose of obtaining legal advice or services from an attorney nor prepared in anticipation of 11 litigation. Item 7 was also voluntarily disclosed to Solomon. Consequently, Item 7 is not protected 12 by either the attorney-client privilege or the attorney work product doctrine. Item 7 includes 13 information which is relevant to Dynasty's defense against Brighton. Thus, Item 7 comes within 14 Rule 26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to any 15 party's claim or defense." Third party privacy rights shall be addressed pursuant to the parties’ 16 Stipulated Protective Order. Based thereon and on the reasoning above, IT IS HEREBY 17 ORDERED: Brighton shall produce Item 7. 18 H. 19 ITEM 8 Item 8, an e-mail drafted by Brighton's counsel and sent to Solomon, attaches a settlement 20 agreement. Brighton asserts three grounds for denying production of this document to Dynasty: (1) 21 settlement communications are privileged and protected from discovery by third parties; (2) 22 disclosing these agreements would infringe on the privacy rights of the other parties to each 23 agreement; and (3) the documents have no relevance to the present action between Brighton and 24 Dynasty. 25 The settlement discussed in Item 8 is relevant to Dynasty's defense against Brighton's claims; 26 thus, it comes within Rule 26(b)(1), which provides for discovery of "any non-privileged matter that 27 is relevant to any party's claim or defense." Brighton also voluntarily disclosed Item 8 to Solomon. 28 Third party privacy rights shall be addressed pursuant to the parties’ Stipulated Protective Order. -6- 06cv1588-H (POR) 1 Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce 2 Item 8. 3 I. 4 ITEM 9 Item 9, an e-mail drafted by Brighton's counsel and sent to PJ Solomon, attaches a settlement 5 agreement. Brighton asserts three grounds for denying production of this document to Dynasty: (1) 6 settlement communications are privileged and protected from discovery by third parties; (2) 7 disclosing these agreements would infringe on the privacy rights of the other parties to each 8 agreement; and (3) the documents have no relevance to the present action between Brighton and 9 Dynasty. 10 The settlement discussed in Item 9 is relevant to Dynasty's defense against Brighton's claims; 11 thus, it comes within Rule 26(b)(1), which provides for discovery of "any non-privileged matter that 12 is relevant to any party's claim or defense." Brighton also voluntarily disclosed Item 9 to Solomon. 13 Third party privacy rights shall be addressed pursuant to the parties’ Stipulated Protective Order. 14 Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce 15 Item 9. 16 J. 17 ITEM 10 Item 10, an e-mail drafted by Brighton's counsel and sent to Solomon, attaches a settlement 18 agreement. Brighton asserts three grounds for denying production of this document to Dynasty: (1) 19 settlement communications are privileged and protected from discovery by third parties; (2) 20 disclosing these agreements would infringe on the privacy rights of the other parties to each 21 agreement; and (3) the documents have no relevance to the present action between Brighton and 22 Dynasty. 23 The settlement discussed in Item 10 is relevant to Dynasty's defense against Brighton's 24 claims; thus, it comes within Rule 26(b)(1), which provides for discovery of "any non-privileged 25 matter that is relevant to any party's claim or defense." Brighton also voluntarily disclosed Item 10 26 to Solomon. Issues of third party confidentiality shall be addressed pursuant to the parties’ 27 Stipulated Protective Order. Based thereon and on the reasoning above, IT IS HEREBY 28 ORDERED: Brighton shall produce Item 10. -7- 06cv1588-H (POR) 1 K. 2 ITEM 11 Item 11 is an email from Gary Freedman, counsel for Brighton, to Jerry Kohl, Laura Young, 3 and Jeffrey Moran, all officers of Brighton. Brighton opposes production of this communication 4 between a Brighton attorney and a Brighton officer because it is (1) attorney-client communication, 5 (2) attorney work product, and (3) irrelevant. 6 Upon review of Item 11, it is apparent the document was neither drafted for the purpose of 7 obtaining legal advice or services from the attorney nor prepared in anticipation of litigation. 8 Rather, the document appears to have been drafted for a business purpose. Thus, Item 11 is not 9 protected by either the attorney-client privilege or the attorney-work product doctrine. Nonetheless, 10 Item 11 is irrelevant to the instant case as it neither relates to Brighton's claim against Dynasty nor 11 Dynasty's defense. Based thereon and on the reasoning above, IT IS HEREBY ORDERED: 12 Dynasty's request for production of Item 11 is denied. 13 L. 14 ITEM 12 Item 12 is an email from Jerry Kohl, a Brighton officer, to Gary Freedman, counsel for 15 Brighton, and Jeffrey Moran and Laura Young, Brighton officers. Brighton opposes production of 16 this communication between a Brighton attorney and a Brighton officer because it is (1) 17 attorney-client communication, (2) attorney work product, and (3) irrelevant. 18 Upon review of Item 12, it is apparent the document was neither drafted for the purpose of 19 obtaining legal advice or services from the attorney nor prepared in anticipation of litigation. 20 Rather, the document appears to have been drafted for a business purpose. Thus, Item 12 is not 21 protected by either the attorney-client privilege or the attorney-work product doctrine. Item 12 is 22 relevant to the instant case as it relates to Dynasty's defense against alleged copyright, trademark, 23 and trade dress infringement. Based thereon and on the reasoning above, IT IS HEREBY 24 ORDERED: Brighton shall produce Item 12. 25 M. 26 ITEM 13 Item 13 is an email from Jinhee Peralta, a paralegal for Brighton, to Jeffrey Moran, 27 Brighton's CFO. Brighton opposes production of this communication because it is (1) 28 attorney-client communication, (2) attorney work product, and (3) irrelevant. -8- 06cv1588-H (POR) 1 Upon review of Item 13, it is apparent the attachment was neither drafted for the purpose of 2 obtaining legal advice or services from the attorney nor prepared in anticipation of litigation. 3 Rather, the attachment appears to have been drafted for a business purpose. Thus, the attachment in 4 Item 13 is not protected by either the attorney-client privilege or the attorney-work product doctrine. 5 The attachment in Item 13 is relevant to the instant case as it relates to Dynasty's defense against 6 alleged copyright, trademark, and trade dress infringement. Conversely, the cover page in Item 13 7 appears to contain attorney work product and is therefore not discoverable. Based thereon and on 8 the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce Item 13 in redacted form. 9 Brighton shall redact the cover sheet but produce the attachment. 10 The discovery allowed under this order shall be completed by September 26, 2008. 11 IT IS SO ORDERED. 12 DATED: September 11, 2008 13 14 LOUISA S PORTER United States Magistrate Judge 15 16 cc: The Honorable Marilyn L. Huff all parties 17 18 19 20 21 22 23 24 25 26 27 28 -9- 06cv1588-H (POR)
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