SECHTIN v. REGENERATION TECHNOLOGIES, INC. et al - Document 779

NOT FOR PUBLICATION U N I T E D STATES DISTRICT COURT F O R THE DISTRICT OF NEW JERSEY I N RE HUMAN TISSUE PRODUCTS L IA B IL I T Y LITIGATION T H I S DOCUMENT RELATES TO: T h e "Family Cases" G R A V E S v. BIOMEDICAL TISSUE S E R V I C E S , LTD., et al., C iv . No. 06-5655 K E N N E D Y -M C I N N I S v. BIOMEDICAL T IS S U E SERVICES, LTD., et al., C iv . No. 06-5140 F O X -ZE I N E R v. BIOMEDICAL TISSUE S E R V I C E S , LTD., et al., C iv . No. 07-3837 F E T Z E R v. BIOMEDICAL TISSUE S E R V I C E S , LTD., et al., C iv . No. 08-3786 W I L S O N v. BIOMEDICAL TISSUE S E R V I C E S , LTD., et al., C iv . No. 08-5153 M I C H E L L I v. BIOMEDICAL TISSUE S E R V I C E S , LTD., et al., C iv . No. 06-4134 C iv . No. 06-135 M D L No. 1763 O P IN IO N H O N . WILLIAM J. MARTINI  WILLIAM J. MARTINI, U.S.D.J.: T h is matter comes before the Court on Defendant Regeneration Technologies, In c .'s appeal of Magistrate Judge Mark Falk's December 12, 2008 Opinion and Order, w h ic h granted in part Plaintiffs' motion to compel the production of certain documents. There was no oral argument. Fed. R. Civ. P. 78. For the reasons that follow, Defendant's a p p e a l is DENIED, and Judge Falk's Order compelling production of the "Category One" d o c u m e n ts is AFFIRMED. I. BACKGROUND S in c e the facts of this case are well-known to the parties, the Court will only b rie f ly recount the relevant facts pertaining to this appeal. In January 2007, Defendant Regeneration Technologies, Inc. ("RTI") filed a m o tio n for summary judgment in the "family cases." RTI argued in its motion that the c la im s asserted by Plaintiffs in Count Six of their Amended Complaint were barred by the g o o d faith immunity defense provided by New York's version of the Uniform Anatomical G if t Act. (Docket Entry No. 209). Specifically, RTI joined Defendant Lifecell C o rp o ra tio n in contending that "a party that relies on facially valid documentation of c o n s e n t to donation, provided by another party, is immune from suits brought by the kin o f the donor alleging emotional distress and other common law torts premised on lack of p ro p e r consent to the donation." (Docket Entry No. 213). On November 13, 2007, this C o u rt denied RTI's motion for summary judgment, deeming a determination of good faith 2  premature, since discovery had not begun on whether RTI and the other "Tissue Bank D e f e n d a n ts " were aware that the consent forms at issue had been fabricated. D is c o v e ry then commenced on the narrow issue of good faith immunity. On O c to b e r 9, 2008, Plaintiffs filed instant motion to compel the production of certain d o c u m e n ts listed by RTI on its privilege log. This motion first was filed in New York s ta te court and then was re-filed as part of this multidistrict litigation on October 31, 2 0 0 8 . This motion to compel involved approximately 366 documents, which were d iv id e d into nine categories by defense counsel. J u d g e Falk's December 12, 2008 Order compelled the production of the ten d o c u m e n ts comprising "Category One."1 The instant appeal followed. II. D ISC U S S IO N D e f e n d a n t RTI filed its appeal pursuant to Local Civ. R. 72.1(c). In this appeal, R T I first states that "the Magistrate does not dispute the privileged nature of the category o n e documents." (RTI Mem. 6). Based on this, RTI then challenges Judge Falk's d e te rm in a tio n that it affirmatively placed these allegedly privileged communications "at is su e " by raising its entitlement to good faith immunity under the Uniform Anatomical In his December 12, 2008 opinion, Judge Falk declined to rule on the production of Categories Two through Nine. Judge Falk cited several problems with the parties' submissions and directed them to meet and confer, pursuant to Local Civ. R. 32.1(a)(1). In addition, Judge Falk provided guidance to the parties as to how they should present sample documents from each category to the court for its consideration. While RTI devotes over five pages of its brief to commentary on Judge Falk's directions, this Court sees no basis upon which it can or should act at this time on Categories Two through Nine. 3 1  Gift Act. (RTI Mem. 4). A. S ta n d a r d of Review U n d e r Fed. R. Civ. P. 72(a), a district court may reverse a Magistrate Judge's order o n a non-dispositive motion if the court finds the ruling to be clearly erroneous or c o n tra ry to law. See also 28 U.S.C. § 636(b)(1)(A); Local Civ. R. 72.1(c)(1)(A). "The d is tric t court is bound by the clearly erroneous rule in findings of facts; the phrase " c o n tra ry to law" indicates plenary review as to matters of law." Haines v. Liggett Group In c ., 975 F.2d 81, 91 (3d Cir. 1992). The burden of showing that a ruling is "clearly e rro n e o u s or contrary to law" rests with the party filing the appeal. Kounelis v. Sherrer, 5 2 9 F. Supp. 2d 503, 518 (D.N.J. 2008). B. A p p lic a b ility of the Attorney-Client and Work Product Privileges T h e threshold issue presented by Plaintiffs' motion to compel is whether the a tto rn e y-c lie n t or work product privileges attach to any of the ten "Category One" d o c u m e n ts .2 Only if privilege applies to these documents is the question of "at issue" w a iv e r raised. A s the party asserting privilege, RTI bears the burden of establishing that privilege While RTI maintains that Judge Falk "does not dispute the privileged nature of the Category One documents," see RTI Mem. 6, this assertion is, at best, misleading. A reading of Judge Falk's opinion reveals that he deemed the ten documents to be outside the scope of the attorney-client privilege. See In re Human Tissue Prods. Liab. Litig., 255 F.R.D. 151, 161-162 (D.N.J. 2008) ("As a result, RTI has failed to establish that the ten (10) communications at issue were made primarily for the purpose of obtaining legal-as opposed to business-advice. Therefore, Plaintiffs' motion to compel the production of these documents would nevertheless be granted."); see also Decl. of Denise Brinker Bense, Ex. 1 at 16-18. 4 2  indeed applies.3 See Spectrum Sys. Intern. Corp. v. Chem. Bank, 78 N.Y.2d 371, 377, 575 N .Y .S .2 d 809, 813 (N.Y. 1991); Marten v. Eden Park Health Serv. Inc., 250 A.D.2d 44, 4 6 -4 7 , 680 N.Y.S.2d 750 (N.Y. App. Div. 1998); Miranda v. Miranda, 184 A.D.2d 286, 5 8 4 N.Y.S.2d 818 (N.Y. App. Div. 1992). Based on the record, the Court finds that RTI f a ile d to meet its burden. The ten "Category One" documents involve the conveyance of b u s in e s s advice and were not prepared in anticipation of litigation. Since the documents a re not protected by privilege, this Court finds no error in Judge Falk's granting of the m o tio n to compel. 1. A tto r n e y -C lie n t Privilege T h is Court concurs with Judge Falk's description of the attorney-client privilege. This privilege protects confidential communications between a client and an attorney m a d e in the course of a professional relationship. See Spectrum Sys. Intern. Corp. v. C h e m . Bank, 78 N.Y.2d 371, 377, 575 N.Y.S.2d 809, 814 (N.Y. 1991) (citing N.Y. C .P .L .R . § 4503(a)). In order for the privilege to apply, the communication must be made " f o r the purpose of facilitating the rendition of legal advice or services." Id. at 378. The p ro v is io n of business advice is not encompassed by the privilege. See id. at 379 (noting th a t a lawyer's communication is not cloaked with privilege when the lawyer conveys b u s in e s s advice); People v. Belge, 59 A.D.2d 307, 309, 399 N.Y.S.2d 539, 540 (N.Y. A p p . Div. 1977). The Court will use New York law to assess the applicability of the attorney-client privilege, in accordance with Judge Falk's uncontested choice of law analysis. 5 3  The determination of whether a particular document is protected is highly f a c t-s p e c if ic and most often requires in camera review. Id. The central inquiry in this re v ie w is "whether, viewing the lawyer's communication in its full content and context, it w a s made in order to render legal advice or services to the client." Spectrum Sys., 78 N .Y .2 d at 379. Further, the communication need not include legal research per se, as lo n g as the communication reflects the attorney's professional skills and judgments.4 Id. a t 380. Here, in camera review of the ten "Category One" documents revealed that each in v o lv e d the provision of business, not legal, advice. Several of the communications at is su e involve the conveyance of business advice by RTI's outside counsel based on M a s tro m a rin o 's background and character. See RTIP 0066, 0069-0070. In two of these d o c u m e n ts , outside counsel states that the issue presented to him is not contractual in n a tu re , but instead pertains to business sense. In addition, two other documents involve th e transmission of a memorandum prepared by a private investigator. See RTIP 0066-67, 0 0 7 1 . These investigative reports and the accompanying transmittal email are not p riv ile g e d simply because the sender is an attorney. Cf. Spectrum Sys., 78 N.Y.2d at 379 (" a n investigative report does not become privileged merely because it was sent to an It seems plain that these "professional skills and judgments" must be legal in nature for privilege to apply. To hold otherwise would eviscerate the well-established principle that the provision of business advice by an attorney is not covered by the attorney-client privilege. See Spectrum Sys., 78 N.Y.2d at 380 ("a lawyer's communication is not cloaked with privilege when the lawyer is hired for business or personal advice, or to do the work of a nonlawyer.). 6 4  attorney."). An attorney's communication to a client reporting facts learned from a third p a rty is not within the attorney-client privilege unless the information is included in legal a n a lys is or advice communicated to the client. See id. at 380. The email accompanying th e transmission of the investigative report in "Category One," however, lacks any indicia o f legal analysis or legal professional judgment; instead, this communication appears to b e aimed at making a business recommendation, as could have been accomplished by a n o n - l a w ye r . Additional "Category One" documents involve the conveyance of background in f o rm a tio n on Mastromarino. Those communciations from RTI employees do not a p p e a r to solicit legal advice. Likewise, the communications from outside counsel do not in te g ra te the facts conveyed into any kind of legal analysis or judgment. See RTIP 00630 0 6 5 ; Kenford Co., Inc. v. Erie County, 55 A.D.2d 466, 469, 390 N.Y.S.2d 715, 718 (N .Y . App. Div. 1977) ("It has long been settled that information received by the attorney f ro m other persons and sources while acting on behalf of a client does not come within th e attorney-client privilege."). Instead, the information conveyed is plainly not legal. The remaining document is a copy of a signed contract, which bears no indication th a t it was prepared by an attorney in the course of a professional relationship. See RTIP 0 0 6 8 . The mere transmission of this contract to outside counsel does not, on its own, re n d e r the document privileged. Looking at this document in its full content and context, th e Court finds that this contract was sent to outside counsel for the purpose of obtaining 7  business advice. The Court notes that if a communication is "primarily or predominantly of a legal c h a ra c te r, the privilege is not lost merely by reason of the fact that it also refers to certain n o n le g a l matters." Rossi v. Blue Cross & Blue Shield of Greater N.Y., 73 N.Y.2d 588, 5 9 4 , 542 N.Y.S.2d 508, 511 (N.Y. 1989). However, these documents are not primarily o r predominantly of a legal character, notwithstanding RTI's assertions to the contrary. In support of its claim of privilege, RTI submitted an affidavit from Jerome H o f f m a n , the outside counsel at issue. Mr. Hoffman states in his affidavit that he was re ta in e d for the purpose of providing legal advice. Decl. of Denise Brinker Bense, Ex. 2. While the Court notes Mr. Hoffman's assertion, it is also "not bound by the conclusory c h a ra c te riz a tio n s of client or counsel that the retention was for the purpose of rendering le g a l advice." Spectrum Sys., 78 N.Y.2d at 379. Further, the pertinent issue is not Mr. H o f f m a n 's perception of why he was retained, it is the character of the advice rendered. Mr. Hoffman himself describes the issue before him as a business decision ­ specifically w h e th e r it made good business sense to continue a relationship with Mastromarino. See R T IP 0069; contra Spectrum Sys., 78 N.Y.2d at 379-80 (finding no reason to disregard c lie n t and counsel's assertion that retention was for the purpose of rendering legal advice w h e re the legal nature of the advice was evident from the contested document itself). After viewing these documents in their full content and context, this Court agrees w ith Judge Falk that outside counsel was involved in this matter solely for the purpose of 8  conducting a factual investigation and making strategic recommendations with respect to R T I's business relationship with Michael Mastromarino and Biomedical Tissue Services (" B T S " ). As such, these "Category One" documents are not covered by attorney-client p riv ile g e . 2. W o r k -P r o d u c t Privilege T h e Court concurs as well with Judge Falk's description of work-product p riv ile g e . The federal work-product doctrine "shelters the mental processes of the a tto rn e y, providing a privileged area within which he can analyze and prepare his client's c a s e ." Holmes v. Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 138 (3d C ir.2 0 0 0 ) (citation omitted); Fed. R. Civ. P. 26(b)(3). The party asserting work product p ro te c tio n has the burden of demonstrating that the documents were prepared in a n tic ip a tio n of litigation. Conoco, Inc. v. U.S. Dep't of Justice, 687 F.2d 724, 730 (3d C ir.1 9 8 2 ). The fact that the documents sought for discovery do not include legal advice is " a s a matter of law, irrelevant provided ... they were prepared in anticipation of litig a tio n ." In re Ford Motor Co., 110 F.3d 954, 968 (3d Cir.1997). As such, the Court first examines whether these documents were created in a n tic ip a tio n of litigation. Here, Defendants have not met their burden, since there is n o th in g in the record to support that these documents were created with litigation in mind. Instead, these documents appear to have been prepared for the reasons discussed above, i.e . to transmit factual information about the background of Michael Mastromarino and to 9  provide business and strategic advice regarding RTI's relationship with BTS. Accordingly, these ten "Category One" documents are not shielded by the work-product p riv ile g e . Since Defendants have failed to demonstrate that privilege applies to these d o c u m e n ts , the Court affirms Judge Falk's granting of Plaintiff's motion to compel.5 III. C O N C L U S IO N F o r the foregoing reasons, Defendant's appeal is DENIED, and Judge Falk's O rd e r compelling production of the "Category One" documents is AFFIRMED. An a p p ro p ria te Order follows this Opinion. /s/ William J. Martini WILLIAM J. MARTINI, U.S.D.J. Since the Court holds that the ten "Category One" documents are not shielded by privilege, the issue of implied waiver is moot for the purpose of this appeal. 10 5