-WVG Callaway Golf Company et al v. Screen Actors Guild, Inc et al, No. 3:2007cv00373 - Document 110 (S.D. Cal. 2009)
Court Description: ORDER Granting in Part and Denying in Part 84 Motion to Compel Production of Documents; ORDER for In Camera Review. Signed by Magistrate Judge Leo S. Papas on 1/12/09. (All non-registered users served via U.S. Mail Service).(pdc)
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-WVG Callaway Golf Company et al v. Screen Actors Guild, Inc et al Doc. 110 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CALLAWAY GOLF COMPANY, et al., 12 Plaintiffs, 13 v. 14 SCREEN ACTORS GUILD, et al., 15 Defendants. ) ) ) ) ) ) ) ) ) Civil No. 07-0373-LAB(LSP) ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION TO COMPEL PRODUCTION OF DOCUMENTS (Doc. #84) ORDER FOR IN CAMERA REVIEW 16 17 On November 7, 2008, Plaintiffs filed a Motion to Compel 18 Production of Documents. 19 Opposition to Plaintiffs’ Motion. 20 filed a Reply to Defendants’ Opposition. 21 Court held a hearing on Plaintiffs’ Motion. 22 reviewed the Motion, Opposition and Reply papers and having heard 23 oral argument on the Motion, HEREBY GRANTS in part and DENIES in 24 part Plaintiff’s Motion and ORDERS an in camera review of many of 25 the disputed documents in issue. 26 \\ On November 21, 2008, Defendants filed an On November 26, 2008, Plaintiffs On December 5, 2008, the The Court, having 27 28 1 07CV0373 Dockets.Justia.com 1 1. Nigro Karlin Documents1 2 Plaintiffs served on Defendants several Requests for 3 Production of Documents seeking all communications between Defen- 4 dants and their independent auditor Nigro, Karlin, Segal & Field- 5 stone (hereafter “NK”). 6 requested 7 contending that such documents reflect communications that are 8 protected by either the attorney-client privilege or work product 9 doctrine. documents Defendants refused to produce any of the between them and their attorneys and NK, 10 Plaintiffs argue that the communications between Defendants, 11 their attorneys and NK are not protected by the attorney-client 12 privilege or work product doctrine. 13 a. Attorney-Client Privilege 14 Plaintiffs contend that the NK documents are not protected by 15 the 16 Defendants’ attorneys. 17 whose only role is that of a percipient witness. 18 not work for Defendants’ attorneys. 19 is the independent accounting firm engaged by Defendants to perform 20 periodic examinations of signatories to the Commercials Contracts. 21 It performs work for Defendants, not Defendants’ attorneys. attorney-client privilege because NK is not a client of Rather, NK is a third party to this action Moreover, NK does In fact, NK confirmed that it 22 Defendants contend that NK, through its employee accountant 23 Brian Meath (hereafter “Meath”) has played an integral role as part 24 of their litigation team in this case. 25 tion to Defendants’ attorneys to facilitate Defendants’ attorneys Meath has provided informa- 26 1 27 28 The documents at issue are listed on Defendants’ Privilege Log as Document nos. 17-19, 23, 27, 29-33, 34, 35-37, 40-44, 48, 49, 51, 53, 55, 57, 58, 60, 63-69, 72-83, 85, 86,88, 89, 92, 93, 94, 96, 99, 101, 104, 106, 115, 130, 134, 136, 139, 153. 155, 158, 163-168, 172, 185, 186, 190, 191, 199, 200, 205, 207, 208, 236, 237-241. 2 07CV0373 1 representation of Defendants in this action. 2 v. Hovel to support their position. Defendants cite U.S. 3 In Hovel, the court stated in pertinent part: 4 ...(T)he presence of an accountant, whether hired by a lawyer or by the client, while the client is relating a complicated tax story to the lawyer or by the client, ought not to destroy the (attorney-client) privilege... the presence of the accountant is necessary, or at least highly useful, for the effective consultation between the client and lawyer which the privilege is designed to permit... 5 6 7 8 9 10 11 12 13 14 15 16 What is vital to the privilege is that the communication be made in confidence for the purpose of seeking legal advice from the lawyer. If what is sought is not legal advice but only accounting service... or if the advice sought is the accountant’s rather than the lawyer’s, no privilege exists. We recognize this draws what may seem to some a rather arbitrary line between a case where the client communicates first to his own accountant (no privilege as to such communications, even though he later consults his lawyer on the same manner), and others where the client in the first instance retains an accountant as a listening post, or consults the lawyer with his own accountant present... but the distinction has to be made if the privilege is neither to be unduly expanded nor to become a trap. Hovel, supra at 922-923 (citations omitted) 17 Here, NK is clearly not a client of Defendants’ attorneys nor 18 was it hired by Defendants’ attorneys to assist them in giving legal 19 advice to Defendants. Rather, NK was hired by Defendants to perform 20 periodic examinations of signatories to the Commercial Contract, 21 note the base compensation for each and determine, based on pension 22 and health contributions reported by the signatory, what percentage 23 of the base compensation is allotted to TV commercials. Further, NK 24 provided Defendants with business-related advice in that Defendants 25 have used NK’s services for several years to audit various signato- 26 ries. Communications regarding business-related advice, rather than 27 for legal advice, are not protected by the attorney-client privi- 28 lege. Therefore, the Court concludes that the NK docs are not 3 07CV0373 1 protected by the attorney-client privilege. 2 b. Work Product 3 Plaintiffs argue that the NK documents are not protected by 4 the work product doctrine. 5 bility of the work product doctrine to the NK documents. 6 Defendants do not address the applica- On January 17, 2003, Defendants announced the audit of 7 Plaintiffs. 8 December 31, 2002. 9 contact Plaintiffs to obtain the necessary records for a complete The audit period was to cover January 1, 1999 to Defendants granted Meath the authority to 10 review of the audit period. 11 of communications with Plaintiffs in which he sought the documenta- 12 tion he needed to perform the audit. 13 documentation. 14 perform a complete audit because he had not received all the 15 documentation he needed from Plaintiffs. 16 On Thereafter, Meath engaged in a series Plaintiffs sent Meath some In late 2003, Meath determined that he could not February 3, 2004, Defendants’ attorneys sought from 17 Plaintiffs the documentation Meath needed to perform the audit. 18 late June 2004, Plaintiffs and Defendants entered into a confidenti- 19 ality agreement. 20 negotiated a tolling agreement to prevent the filing of the current 21 suit. 22 the needed documentation continued through September 2005. 23 (Declaration of Brian Meath in Support of Counter-Claimants’ Motion 24 to Compel Production of Documents, November 1, 2007) In From September to November 2004, the parties Communications between Plaintiffs and Defendants regarding 25 Meath testified at his deposition that prior to 2005, when 26 Defendants would ask for his services, he would summarize the 27 Commercials 28 Contract and the contributions that were paid. Contract, summarize 4 the base compensation in the If he was requested 07CV0373 1 to do so he would, and sometime in 2005 he began to, prepare a 2 calculation of what guideline applied and what additional contribu- 3 tions would need to be made to meet a potential shortfall, based on 4 his review of the Contract. If allocations required to be made for 5 covered versus noncovered services, he would refer the matter to 6 Defendants’ Allocation Subcommittee for it to determine whether 7 there was a basis for accepting a different allocation. (Deposition 8 of Brian Meath, May 28, 2008, at 14, 17) 9 10 Federal Rule of Civil Procedure 26(b)(3) states in pertinent part: 11 ...(A) party may not discover documents... that are prepared 12 in anticipation of litigation or for trial by or for another party 13 or its representatives. (emphasis added) 14 Here, the activities of Defendants, Defendants’ attorneys and 15 Meath make it apparent that some time in 2004 or 2005, Meath’s work 16 changed from performing audits and other business-related services, 17 as requested by Defendants, to performing some type of work to 18 assist Defendants’ attorneys. 19 Plaintiffs and Defendants, the Court cannot precisely determine if, 20 and at what point in time, the nature of Meath’s work changed or 21 whether the work Meath did was done in anticipation of litigation. 22 At a certain point in time, the activities of Defendants, Defen- 23 dants’ counsel and Meath may have shifted Meath’s work from that of 24 a business nature to work to assist Defendants’ attorneys in 25 providing legal advice to Defendants in anticipation of litigation. 26 See St. James Stevedoring Co. V. Femco Machine Co. 173 F.R.D. 431, 27 433 (E.D. La. 1997) 28 However, from the papers filed by Therefore, on or before January 20, 2009, Defendants shall 5 07CV0373 1 produce to the Court the documents listed in footnote 1 for in 2 camera review so that the Court can determine from the documents the 3 nature of Meath’s work and if and when the nature of Meath’s work 4 changed 5 performing work to assist Defendants’ attorneys in providing legal 6 advice to Defendants in anticipation of litigation. from performing business activities for Defendants to 7 8 2. Allocation Subcommittee Meeting Minutes2 9 Plaintiffs contend that Defendants have long had a Collec- 10 tions Committee to address issues of unpaid or underpaid contribu- 11 tions and a separate Allocations Subcommittee to address what 12 portion of multi-service endorsement agreements should be allocated 13 to performing in TV commercials. Plaintiffs assert that the minutes 14 of the meetings of the Allocation Subcommittee are relevant to this 15 action. 16 documents. Therefore, they should be entitled to discovery of those 17 Defendants contend they have withheld from production these 18 documents because their attorneys were present at all of the 19 meetings of the Allocation Subcommittee. 20 discussed at those meetings and the minutes summarizing the meetings 21 are protected from discovery by the attorney-client privilege and 22 work product. Therefore, everything 23 An attorney’s attendance at a meeting held for a business 24 purpose does not render privileged the communications made at such 25 meetings. 26 they must relate to acquisition or rendition of legal services. The For communications at such meetings to be privileged, 27 28 2 The documents at issue here are listed on Defendants’ Privilege Log as Document. nos. 121-129, 227, 229. 6 07CV0373 1 mere fact that clients were at a meeting with counsel in which legal 2 advice was requested or received does not mean that everything said 3 at the meeting is privileged. Neuder v. Battelle Pacific Northwest 4 194 F.R.D. 289 (D.C. D.C. 2000) 5 Here, from Plaintiffs’ and Defendants’ papers, the Court 6 cannot precisely determine whether the documents at issue are 7 protected from disclosure. 8 2009, Defendants shall submit the documents listed in footnote 2 to 9 the Court for in camera review. Therefore, on or before January 20, 10 11 3. Defendant’s Failure to Comply With Expert Witness Subpoenas 12 Defendants designated Jon Albert, John McGuire and John 13 McGuinn as expert witnesses. 14 subpoenas to Defendants for the expert witnesses’ production of 15 documents and appearance at depositions. 16 Plaintiffs requested that the following documents be brought to the 17 depositions: On July 25, 2008, Plaintiffs issued As to each subpoena, 18 a. Experts’ files pertaining to this lawsuit, including any 19 and all documents reviewed or considered in connection with the 20 preparation of their testimony, all draft reports, and all analyses 21 and 22 testimony; 23 24 25 26 notes made by them in preparation of their opinions and b. All documents provided to the experts in connection with their services in this matter, from any source; c. All documents related to experts’ retention by Defendants, including retention agreements, time records and invoices; 27 d. All communications between the experts and Defendants or 28 their counsel related to this case or to the subject of their 7 07CV0373 1 testimony; and 2 3 e. All prior expert reports and transcripts of prior deposition and trial testimony. 4 The subpoenas had a production date of August 11, 2008, one 5 week prior to the first expert witness deposition. 6 produced 7 subpoenas. 8 indicate 9 Therefore, Plaintiffs cannot determine if all of the documents 10 thousands of documents and written Defendants responses to the However, the produced documents were not segregated to which expert witness reviewed a particular document. requested in the subpoenas were produced. 11 Plaintiffs argue that they are entitled to production of all 12 of the documents listed above. 13 Defendants are required to segregate the documents to indicate which 14 expert witness reviewed a particular document. 15 Plaintiffs further argue that Defendants argue that their expert witnesses did not perform 16 any 17 “expert” files and relied upon their own knowledge and expertise in 18 proffering their opinions. 19 the documents produced in this case have been segregated according 20 to Responses to Requests for Production of Documents. independent work, research, studies or analyses, have no Further, Defendants argue that none of 21 The Court determines that Plaintiffs are entitled to the 22 production of every document that is responsive to (a) through (e) 23 above. 24 produce all documents responsive to (a) through (e) above. 25 documents shall be segregated and shall indicate for which request 26 the documents are responsive and for which expert witness the 27 documents pertain. Therefore, on or before January 20, 2009, Defendants shall 28 8 07CV0373 The 1 2 4. Defendants’ Failure to Comply With Prior Discovery Orders On May 19, 2008, the Court ordered Defendants to produce 3 documents in response to specific discovery requests. 4 contend that while Defendants produced some documents as ordered, 5 they did not produce all documents responsive to Requests for 6 Production of Documents nos. 9, 14 and 19. 7 they have produced all documents responsive to those requests. Plaintiffs Defendants assert that 8 a. Request #9 9 Request #9 requests production of all documents concerning 10 any determination by any Defendant as to what portion of a multi- 11 service contract for a celebrity or athlete endorser of products or 12 services who appeared in any commercial, or who, pursuant to their 13 endorsement contract, could have been required to appear in a 14 commercial but did not, should be allocated to commercials produced 15 and shot in the United States. 16 Defendants argue that the requested documents are not 17 relevant to this litigation because the District Judge in this case 18 has ruled that the application of the guidelines Defendants have 19 used is not an adequate defense in this case. 20 argue that they have produced to Plaintiffs thousands of documents 21 relating to numerous unrelated audits, contracts and Settlement 22 Agreements concerning claims litigated over the past ten years. Further, Defendants 23 Plaintiffs argue that the date range for the documents 24 requested has never been established, so they are unsure whether 25 they have received all responsive documents. 26 The Court determines that to the extent Defendants have not 27 done so, on or before January 20, 2009, Defendants shall produce all 28 documents responsive to the request dated from January 1, 1999 9 07CV0373 1 through October 2007. 2 not only the documents reflecting the ultimate determination, but 3 all the documents reflecting negotiations that led to the ultimate 4 determination. 5 formal response that all documents responsive to the request have 6 been produced. The documents to be produced shall include Further Defendants shall serve on Plaintiffs a 7 b. Request #14 8 Request #14 requests all documents concerning settlements 9 entered into by any Defendant with any person or entity concerning 10 the amount of contributions to Defendants on behalf of any celebrity 11 or athlete endorser for the following entities: (i) Nike; (ii) 12 Bearing Point; and (iii) Titleist/Foot Joy. 13 Plaintiffs contend that Defendants produced thousands of 14 documents, but the documents produced are not responsive to the 15 request. 16 documents responsive to the requests with respect to Nike and 17 Titleist/Foot Joy. Defendant also produced the settlement agreement 18 with respect to Bearing Point. Defendants contend that it has produced to Plaintiffs all 19 The Court determines that to the extent Defendants have not 20 done so, on or before January 20, 2009, Defendants shall produce all 21 documents responsive to the request. 22 shall 23 determination, but all the documents reflecting negotiations that 24 led to the ultimate determination. 25 on Plaintiffs a formal response that all documents responsive to the 26 request have been produced. include not only the The documents to be produced documents reflecting the ultimate Further Defendants shall serve 27 c. Request #19 28 Request #19 requests all documents concerning how Defendants 10 07CV0373 1 actually calculated the contributions to them from producers of 2 motion pictures, television shows and commercials regarding multi- 3 service contracts. 4 counsel stated to the Court that Defendants will provide a formal 5 response to Plaintiffs’ request stating that all documents respon- 6 sive to the request have been produced after a reasonable and 7 diligent search. 8 been served on Plaintiffs, it shall be served no later than 9 January 20, 2009. 10 11 At the hearing on the Motion, Defendants’ To the extent that the formal response has not Plaintiff’s Motion is GRANTED in part and DENIED in part. IT IS SO ORDERED. 12 13 DATED: January 12, 2009 14 15 16 Hon. Leo S. Papas U.S. Magistrate Judge 17 18 19 20 21 22 23 24 25 26 27 28 11 07CV0373
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