Williams et al v. Duke Energy International, Inc, No. 1:2008cv00046 - Document 187 (S.D. Ohio 2014)

Court Description: ORDER granting in part and denying in part 175 Motion to Compel; granting 180 Motion to Strike. Signed by Magistrate Judge Mark R. Abel on 8/8/2014. (Abel, Mark)

Download PDF

Williams et al v. Duke Energy International, Inc Doc. 187 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO EASTERN DIVISION Anthony Williams, et al., : : Civil Action 1:08-cv-00046 : Judge Sargus Duke Energy Corporation, et al., : Magistrate Judge Abel Defendants : Plaintiffs v. Order Plaintiffs Anthony Williams, BGR, Inc., Munafeo, Inc., and Aikido of Cincinnati bring this action alleging that their electricity supplier, Duke Energy, gave illegal rebates to favored large customers. When Duke sought approval in early 2004 for an electricity rate plan, some large electricity consumers and industry groups opposed it. Duke Energy then reached an agreement with those customers to sell them electricity through Cinergy Retail Services, LLC (“CRS”), and they withdrew their opposition. Later Duke decided not to go forward with the initial agreement but to negotiate “option agreements” with the 22 customers. Plaintiffs contend CRS was a sham corporation Duke Energy set up to funnel tens of millions of dollars of illegal rebates back to the favored large electricity consumers. This matter is before the Magistrate Judge on plaintiff’s January 10, 2014 motion to compel Duke to produce documents for which it claims attorney-client privilege or work product protection or, in the alternative, for in camera, review of those documents (doc. 175) and defendants’ February 18, 2014 motion to strike affidavits attached to plaintiffs’ reply brief (doc. 180). Dockets.Justia.com I. Summary of argument In their second set of discovery requests, plaintiffs’ Interrogatory No. 17 and Request for Production No. 10 sought documents referring or relating to the options agreements. Plaintiffs now seeks production of 105 responsive documents for which Duke claims either attorney-client privilege or work product protection. These documents relate to one of three legal proceedings: (1) 2003-2008 PUCO Rate Stabilization Plan (“RSP”) proceedings; (2) December 2006-September 2008 employment discrimination/whistleblower lawsuit brought by John Deeds against Duke Energy; and (3) this lawsuit, Anthony Williams v. Duke Energy Corp., et al., 1:08-cv-0046 (S.D. Ohio January 2008-present). Plaintiffs maintain that the documents should be produced because Duke has failed to present facts establishing the factual predicates for the attorney-client privilege/work product protection and because the documents were created when Duke sought legal advice for the purpose of perpetrating a fraud on them, PUCO, and the Supreme Court of Ohio. Alternatively, plaintiffs seek an in camera review of the documents to determine whether they are privileged and, if so, whether they are subject to the crime-fraud exception. Has Duke demonstrated the documents are privileged? Duke offers the December 17, 2013 Declaration of Ariane S. Johnson's1 to establish the factual predicates for its claims of attorney-client privilege and work product protection. Plaintiffs argue that Johnson had insufficient involvement with the communications to be in a position to assert the factual 1 Doc. 176-2, PageID 3630-41. 2 predicates for the claims of attorney-client privilege and work product protection. Johnson has been employed in Duke’s legal department from May 2003 to the present.2 Although she was not centrally involved in the PUCO proceedings or this lawsuit, Johnson was personally involved in the Deeds litigation.3 She is knowledgeable about the responsibilities of the individuals who authored and received the emails at issue,4 and the legal proceedings they are said to relate to.5 Johnson asserts that the three legal proceedings “resulted in numerous internal discussions among and between and involving the listed attorneys and paralegals, the attorneys and clients, and the attorneys and their supervising attorneys . . . .”6 Clients in the public relations department sought legal advice from Johnson and other members of the legal department about the press releases Deeds’ attorney frequently issued.7 Finally, Johnson states: “I have reviewed the challenged documents on the privilege log that Duke has submitted in this matter and have attempted to group them to better explain the privileges.”8 2 Ariane S. Johnson's December 17, 2013 Declaration, p. 1, ¶ 2, Doc. 176-2, PageID 3630. She was first employed in that department by Cinergy Corporation and later by Duke. Id., ¶¶ 2-3. 3 Id., p. 2, ¶ 9, PageID 3631. 4 Id., pp. 2-6, ¶¶ 7-10, PageID 3631-35. 5 Id., pp. 6-8, ¶¶ 11-27, PageID 3635-37. 6 Id., p. 8, ¶ 28, PageID 3637. 7 Id., ¶ 29. 8 Id., p. 8, ¶ 30, PageID 3637. 3 II. Attorney-client privilege, crime-fraud exception, and work product protection: Legal principles Elements of attorney-client privilege. Questions of attorney-client privilege are mixed questions of law and fact. In federal court, questions of privilege are determined by the federal common law. The factual predicates for a claim of attorney-client privilege are: (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence, (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) unless the protection is waived. Fausek v. White, 965 F.2d 126, 129 (6th Cir. 1992)(citing United States v. Goldfarb, 328 F.2d 280, 281 (6th Cir. 1964)).9 It is often said that the attorney-client privilege should be construed narrowly.10 The attorney-client privilege applies both to "[c]onfidential disclosures by a client to an attorney made in order to obtain legal assistance,"11 and ''to lawyer-to-client communications that reveal, directly or indirectly, the substance of a confidential communication by the client.''12 Plaintiffs' arguments. Plaintiffs argue that Johnson's declaration asserts insufficient facts to establish the factual predicates necessary to support a claim of attorney-client privilege. She did not participate in the email exchanges or in the underlying legal proceedings 9 Reed v. Baxter, 134 F.3d 351, 355-56 (6th Cir. 1998). See, Guy v. United Healthcare Corp., 154 F.R.D. 172, 177 (S.D. Ohio 1993)(King, Magistrate Judge). 10 11 Fausek v. White, 965 F.2d at 129. Fisher v. United States, 425 U.S. 391,403 (1976) (citations omitted). 12 Beery v. Thomson Consumer Elecs., Inc., 218 F.R.D. 599, 603 (S.D. Ohio 2003) (quoting Am. Standard Inc. v. Pftzer Inc., 828 F.2d 734, 745 (Fed. Cir. 1987)). 4 and business transactions they were about,13 and her declaration does not assert facts specific to particular emails. It is often not possible to determine from the declaration whether defendants are asserting the attorney-client privilege, work product protection, or both. Her "brief descriptions" of the emails are often conclusory, vague and unclear about their subject matter and the purpose. Johnson had no knowledge of whether the nonlawyer participants in the communications were aware that they were for the purpose of seeking or obtaining legal advice. Finally, her declaration provides insufficient facts for the court to determine whether the documents were in the ordinary course of business or primarily for business purposes, rather than the primary purpose of obtaining legal advice. Plaintiffs maintains that a corporation asserting attorney-client privilege must prove that the employee knew the communication was for the purpose of obtaining legal advice. American Municipal Power, Inc. v. Bechtel Power Corp., 2012 WL 6059357, *2 (S.D. Ohio December 6, 2012); Graff v. Haverhill North Coke Co., 2012 WL 5495514, *7 (S.D. Ohio November 13, 2012); Henderson Apartment Ventures, LLC v. Miller, 2012 WL 222302 (D. Nev. January 24, 2012); See, In re Perrigo, 128 F.3d 430, 437 (6th Cir. 1997). Communications to a lawyer for business purposes are not privileged. Documents prepared and emailed for review by both legal and nonlegal employees are often held to be not privileged because the communications were not made for the primary purpose of seeking legal advice. North 13 Johnson had some, unspecified involvement in the Deeds litigation and was involved "peripherally in certain Public Utilities Commission of Oho ("PUCO") proceedings." Johnson Decl., ¶ 9, doc. 175-1, PageID 3631. 5 Carolina Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 514 (M.D. N.C. 1986). Documents whose "primary purpose" was "business negotiations" rather than "legal advice" are not privileged. United States v. Davis, 131 F.R.D. 391, 401 (S.D. N.Y. 1990). Plaintiffs argue that discovery suggests that the withheld communications were made for business purposes and not because of any legal proceedings. Defendants' arguments. Defendants maintain that the case law does not support plaintiffs’ argument that there is a ninth requirement: That in a corporate setting, the attorney-client privilege does not apply unless the employees with whom the in-house lawyer was communicating were aware that the communication was for purposes of obtaining legal advice.14 Consequently, defendants argue, the court should reject plaintiffs’ argument that Duke has failed to support its assertions of attorney-client privilege because Ms. Johnson lacks the personal knowledge about whether the employees who were communicating with Duke’s in-house counsel were aware that the communication was for purposes of obtaining legal advice.15 Defendants argue that the two cases on which plaintiffs rely, Am. Mun. Power, Inc. v. Bechtel Power Corp., No. 2:11-cv-131, 2012 U.S. Dist. LEXIS 173082, at *5 (S.D. Ohio December. 6, 2012), and Henderson Apartment Venture, LLC v. Miller, No. 2:09-cv-01849-HDM-PAL, 2012 U.S. Dist. LEXIS 8276, at *10-11 (D. Nev. Jan. 24, 2012), both cite to the United States Supreme Court's opinion in Upjohn v. United States, 449 U.S. 383, 14 Plaintiffs’ January 10, 2014 Motion to Compel, p. 15, PageID 3568 (citation omitted). 15 Id., p. 22 (citation omitted). 6 394 (1981). Both cases mention plaintiffs' asserted ninth factor in passing--the issue plays no part in either court's determination of the application of the attorney-client privilege. Both cases imprecisely describe the holding in Upjohn. According to defendants, the issue in Upjohn was whether the Upjohn Company could assert attorney-client privilege for questionnaires that the Company's attorneys sent out to its general and area managers to investigate allegations that the company had bribed foreign government officials.16 In finding that the questionnaires were privileged, the Supreme Court reversed the Sixth Circuit's opinion, which had held that a corporation may assert the attorney-client privilege only for communications between its attorneys and senior management.17 The Supreme Court found that the "control group" test adopted by the Sixth Circuit would interfere with attorneys' ability to obtain necessary information from low- and middle-level employees, and corporations' ability to communicate legal advice to those same employees.18 The Court then concluded that the managers' responses to the questionnaires were privileged because they were ''made by Upjohn employees to counsel for Upjohn acting as such, at the direction of corporate superiors in order to secure legal advice from counsel."19 In reaching that conclusion, the Court noted that "[t]he communications concerned matters within the scope of the employees' corporate duties, and 16 See Upjohn, 449 U.S. at 386--87. 17 See id. at 390--92. 18 See id. at 391-92. 19 Id. at 394 (footnote omitted). 7 the Circuit would interfere with attorneys' ability to obtain necessary information from low- and middle-level employees, and corporations' ability to communicate legal advice to those same employees.20 The Court then concluded that the managers' responses to the questionnaires were privileged because they were ''made by Upjohn employees to counsel for Upjohn acting as such, at the direction of corporate superiors in order to secure legal advice from counsel."21 In reaching that conclusion, the Court noted that "[t]he communications concerned matters within the scope of the employees' corporate duties, and the employees themselves were sufficiently aware that they were being questioned in order that the corporation could obtain legal advice.''22 The Upjohn Court did not include the employees' subjective awareness of the purpose of the communications an essential element in proving the application of the attorneyclient privilege to communications in a corporate context, and subsequent applications of the Upjohn holding have not treated it as such. For example, in an opinion issued the following year, the Southern District of Ohio found that whether a company, its counsel and the company's litigation consultant ''were aware of the legal implications of [purportedly privileged] communications when made, particularly with respect to potential litigation," was one of several relevant considerations under Upjohn.23 This Court held, however, that 20 See id. at 391-92. 21 Id. at 394 (footnote omitted). 22 Id. 23 Baxter Travenol Labs., Inc. v. Lemay, 89 F.R.D. 410,414 (S.D. Ohio 1981) (citing Upjohn, 101 S. Ct. at 689). The issue that was Travenol’s focus was whether the attorney8 a communication need not match all of the circumstances present in Upjohn in order to be attorney-client privileged. Ultimately, this Court held, a "communication should be protected . . . as long as the communication is made by the client's employee, qua employee, at the client's behest, in order to secure legal advice, and such communication is intended by the client and participants to be confidential."24 While defendants maintain that they have made a sufficient factual showing that the communications were attorney-client communications, plaintiffs assert instead that Duke has not demonstrated that the communications were ''primarily for the purpose of securing or conveying legal advice rather than business information. Rationale for Privilege. Loyalty is intrinsic to an attorney-client relationship. It is offended if a party can use the opponent’s lawyer to make a case.25 Second, the privilege encourages clients to make full disclosures to their lawyers.26 Costs of Enforcing the Privilege. The privilege excludes relevant evidence. It creates impediments to the search for truth. Costs increase when an organization with client privilege applied to communications to a former employee who was acting as a consultant to the corporation. 24 Id. 25 Reed v. Baxter, above, citing McCormick on Evidence §87. 26 Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998); Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)(The purpose of the attorney-client privilege is “to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observances of the law and administration of justice.”); Reed v. Baxter, above. 9 many members asserts the privilege.27 However, the U.S. Supreme Court has held that the loss of evidence is justified, in part, because communication might not have been made without the privilege.28 The Court also noted that although there is a good deal of informed speculation about whether narrowing the privilege would deter honest communications from clients to lawyers, there is little or no empirical evidence supporting that view. Id. Burden Demonstrating Applicability of the Attorney-Client Privilege. The party asserting the privilege has the burden of proving each element of the claim. The claim of privilege must be made question-by-question and document-by-document.29 Factual showing needed to demonstrate that a communications is privileged. Conclusory descriptions of documents in a privilege log are insufficient to meet the producing party’s burden of establishing that the document was an attorney-client communication. In re Search Warrant Executed at Law Offices of Stephen Garea, 1999 WL 137499, *1-*2 (6th Cir. March 5, 1999). The party asserting privilege “must make a minimal showing that the communication involved legal matters. This showing is not onerous and may be satisfied by as little as a statement in the privilege log explaining the nature of the legal issue for which advice was sought.” Id. That showing “must provide the reviewing court with enough information for it to make a determination that the document in question was, in 27 Reed v. Baxter, above. 28 Swidler & Berlin v. United States, 524 U.S. at 408. 29 United States v. Lawless, 709 F.2d 485, 487 (7th Cir. 1983). 10 fact, a confidential communication involving legal advice. Id., *2. Elements of attorney-client privilege: Decision. While the participants’ understanding of the purpose of a communication is a factor in determining whether the communication is privileged, a corporation asserting attorney client privilege does not have to show as a factual predicate that lower level employees subjectively believed that the communication was an attorney-client communication. The Upjohn decision applied an objective test. The question is whether corporate management is communicating with in-house counsel and causing lower lever employees to participate in the communications for the primary purpose of getting legal advice. This is an objective inquiry. Of course, if a lower level employee subjectively believed that the primary purpose of the communication was to make a business decision and that in-house counsel are being kept in the loop so that they are knowledgeable about the status of the business decision and that understanding is consistent with the substance of the communication, that would weigh heavily toward a finding that the communication was not privileged. Work product protection. Work product is protected by Rule 26(b)(3)30 and 30 That rule provides, in relevant part: (3) Trial Preparation: Materials. (A) Ordinarily, a party may not discover documents . . . that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). But, subject to Rule 26(b)(4), those materials may be discovered if: (I) they are otherwise discoverable under Rule 11 Rule 26(b)(4)(B)31, Fed. R. Civ. P., respectively. Work product is a protection, not a privilege. It is intended to protect the adversary system. As Justice Jackson said in Hickman v. Taylor, 329 U.S. 495, 516 (1947), "[d]iscovery was hardly intended to enable a learned profession to perform . . . on wits borrowed from the adversary." It applies only to “documents and tangible things,” Rule 26(b)(3), not to a witness’s testimony. When a claim of work product protection is made, the initial burden is on the party seeking discovery to show that the material requested is relevant within the meaning of 26(b)(1); and (ii) the party shows that has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means. 31 That rule provides in relevant part: (4) Trial Preparation: Materials. (A) Experts Who May Testify. A party may depose any person who has been identified as an expert whose opinions may be presented at trial. If Rule 26(a)(2)(B) requires a report from the expert, the deposition may be condu8cted only after the report is provided. (B) Expert Employed Only for Trial Preparation. Ordinarily, a party may not, by interrogatories or deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial. But a party may do so only: (I) as provided in Rule 35(b); or (ii) on showing exceptional circumstances under which it is impracticable for the party to obtain facts or opinions on the same subject by other means. 12 Rule 26(b)(1), Fed. R. Civ. P.32 Once that showing is made, the burden shifts to the party asserting work product “to show that the material was ‘prepared in anticipation of litigation or for trial’ by or for that party or that party’s representative, including that party’s attorney, consultant, surety, indemnitor, insurer or agent.”33 The question is “whether, in light of the nature of the document and the factual situation in the particular case, the documents can fairly be said to have been prepared or obtained because of the prospect of litigation.”34 If the objecting party meets this burden, the requesting party then has the burden of showing that he (a) has substantial need of the materials in preparation of the party’s case, and (b) that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. 847 F.2d at 339-40. Under no circumstances may the court “permit discovery of ‘mental impressions of an attorney or other representative of the party concerning litigation.’” 847 F.2d at 340. The objecting party has the burden of proving that the documents contain the mental impressions of his lawyer. Id. III. Crime-Fraud Exception Showing Necessary for Crime-Fraud Exception In Camera Review. The moving party must make a factual showing adequate to support a good faith belief that the in 32 Toledo Edison v. G A Technologies, Inc., 847 F.2d 335, 339 (6th Cir. 1988). 33 Id. 34 8 Wright, Miller & Marcus, Federal Practice and Procedure: Civil 2d § 2024 at n 10. 13 camera review will reveal evidence that would establish the crime-fraud exception applies.35 Groundless fishing expeditions should not be permitted.36 Crime-fraud exception. The attorney-client privilege "protects communications relating 'to a fact of which the attorney was informed by his client, without the presence of strangers, for the purpose of securing primarily either an opinion of law or legal services, or assistance in some legal proceeding, and not for the purpose of committing a crime or tort.'''37 To overcome an otherwise valid claim of attorney-client privilege or the work-product protection on this basis, a plaintiff must (1) make "a prima facie showing that a sufficiently serious crime or fraud occurred to defeat the privilege" and (2) establish "some relationship between the [attorney-client] communication at issue and the prima facie violation."38 The party asserting that the crime-fraud exception applies must show that ''the party sought legal advice in furtherance of the crime or fraud."39 The party must demonstrate that there was a "'close relationship' between the communications and the client's illegal activities" and that "the 35 United States v. Zolin, 491 U.S. 544, 572 (1989); In re Richard Roe, Inc., 68 F.3d 38, 40-41 (7th Cir. 1995). 36 491 U.S. at 571. 37 Guy v. United Healthcare Corp., 154 F.R.D. 172, 177 (S.D. Ohio 1993) (quoting United States v. United Shoe Machine Corp., 89 F. Supp. 357, 358 (D. Mass. 1950)). 38 In re Antitrust Grand Jury, 805 F.2d at 164 (citing In re Sealed Case, 754 F.2d 395, 399 (D.C. Cir. 1985)); Safety Today, Inc. v. Roy, No. 2:12-cv-510, 2013 U.S. District LEXIS 147765, at *18-19 (S.D. Ohio October. 11, 2013). 39 SEC v. Sierra Brokerage Servs., Inc., No. 2:03-cv-326, 2005 U.S. District. LEXIS 23866, at *22 (S.D. Ohio October. 18, 2005) (citing In re Antitrust Grand Jury, 805 F .2d at 168) (other citation omitted). 14 communications with counsel were intended in some way to facilitate or to conceal criminal activity.''40 The mere assertion that a crime or fraud has occurred is not enough to overcome a valid attorney-client privilege and work produce claims.41 ''To drive the privilege away, there must be 'something to give color to the charge;' there must be 'prima facie evidence that it has some foundation in fact.''' Id. (Citations omitted). Plaintiffs' argument. Plaintiffs argue that the decision of the Sixth Circuit remanding this case to the district court establishes the relevance of the documents sought and the applicability of the crime fraud exception to the attorney-client privilege. First, plaintiffs read that decision to hold that the illegal rebates they challenge were not rates subject to PUCO jurisdiction;42 consequently, this court has jurisdiction over their federal claims under the Robinson-Patman Act ("RPA") and the RICO Act and their state-law claims for civil conspiracy, violation of the Ohio Corrupt Practices Act, and common-law fraud.43 Plaintiffs argue that the Sixth Circuit’s finding that they properly alleged money laundering and telecommunications fraud as a predicate to their civil RICO and Ohio Corrupt- 40 United States v. Skeddle, 989 F. Supp. 912, 903--04 (N.D. Ohio 1997) (citations omitted). 41 See Clark v. United States, 289 U.S. 1, 15 (1933). 42 The Sixth Circuit characterized plaintiffs' claims as challenging "payments made outside of the rate scheme" that "amount to an 'indirect rebate.' . . . Plaintiffs are arguing that Defendants, in violation of the law, indirectly granted rebates to favored large customers." Williams, 681 F.3d at 797. 43 Williams v. Duke Energy International, Inc., 681 F.3d 788, 797-798, 799-805 (6th Cir. 2012). 15 Practices Act claims,44 supports their argument that the crime-fraud exception to the attorney-client privilege applies. The Sixth Circuit held that plaintiffs had plead facts that, if proved, would amount to violations of civil RICO and the Ohio Corrupt Practices Act: [T]he alleged transfer of money from favored customers to Duke, and from Duke to DERS, and from DERS back to the favored customers as 'rebates' tainted the funds, which became the 'proceeds' of unlawful activities. Mail fraud constitutes an 'unlawful activity' according to 18 U.S.C. §§ 1956(c) (7)(A) and 1961(1). Thus, taking as true the allegations that Appellee Duke collected money through its use of the mails and funneled the money to DERS and thereafter back to favored customers in a fraudulent scheme, we find that Plaintiffs have set out a cognizable claim of money laundering based upon the unlawful activity of mail fraud. 681 F.3d at 803. The Sixth Circuit also recognized obstruction of justice as an additional viable predicate for plaintiffs' Ohio Corrupt Practices Act claim: The selective payment of rebates constitutes a felony under Ohio law. See Ohio Rev. Code §§ 4905.32-.33(A), 4905.56, 4905.99. Thus, communicating false information to any person for the purpose of hindering the discovery of the selective payment of rebates would constitute obstruction of justice . . . . [C]orporate counsel are not permitted to freely make false statements before a court and evade charges of obstruction of justice. 681 F.3d at 804. Further, the Sixth Circuit held that plaintiffs’ allegation that Duke’s mailings to plaintiffs and other customers that the electric charges were “mandatory and unavoidable” fraudulently concealing the rebates to the favored customers was sufficient to plead the predicate acts to the civil RICO and Ohio Corrupt Practices Act claims: As Plaintiffs have pled, Duke’s fraud was in asserting through the mail that all customers had to pay “mandatory and unavoidable” electricity charges, implying that all customers paid the same rate (which they were required to do under the RPA). Thus, Plaintiffs allege that Duke’s non-disclosure of the side agreements constitutes fraud. 44 681 F.3d at 802-804 16 681 F.3d at 802. The Court of Appeals concluded that plaintiffs had pleaded fraud with sufficient particularity to satisfy Rule 9(b), Fed. R. Civ. P. Id., at 803. Moreover, the Sixth Circuit held: taking as true the allegations that Appellee Duke collected money through its use of the mails and funneled the money to DERS and thereafter back to favored customers in a fraudulent scheme, we find that Plaintiffs have set out a cognizable claim of money laundering based upon the unlawful activity of mail fraud. Id. Plaintiffs further argue that there is a prima facie case of obstruction of justice based on Duke lawyer Paul Colbert's denying knowing of any side agreements even though he signed side agreements with the Ohio Hospital Association on behalf of its hospitals. Communicating false information to any person for the purpose of hindering the discovery of the selective payment of rebates would constitute obstruction of justice. Defendants' arguments. Defendants argue that plaintiffs make no effort to tie the documents they seek to the crimes and frauds they allege in their complaint. Instead, citing Skeddle, 989 F. Supp. at 900 and In re Miller, 247 B.R. 704, 712 (Bankr. N.D. Ohio 2000, they assert that the court should exercise its discretion to review the documents in camera to evaluate whether the second prong of the test has been met. Defendants maintain that this argument should be rejected because the court has already held that "[c]ourts should not routinely conduct in camera reviews of documents[,]" as such reviews ''undermine the privilege and are both 17 burdensome for judges and unnecessarily invasive of litigants' privacy.45 Instead, the Court directed Plaintiffs to file a motion to compel and make the necessary showing to defeat Duke's privilege assertions.46 The Order further stated that plaintiffs needed to ''make a factual showing adequate to support a good faith belief that the in camera review [would] reveal evidence that would establish that the crime-fraud exception applies."47 Defendants further argue that plaintiffs have made no attempt to make the showing required by the November 12, 2013 Order. That Order said that Zolin's warning that "[t]here is no reason to permit opponents of the privilege to engage in groundless fishing expeditions, with the district courts as their unwitting (and perhaps unwilling) agents."48 Defendants maintain that given plaintiffs' failure to demonstrate a prima facie case for any crime or fraud---or to show a 'close relationship' between the communications and the client's [alleged] illegal activities"-this Court should decline their request for in camera review. Defendants argue that plaintiffs have not come forward with evidence of any crime or fraud. Although the Sixth Circuit may have said that "[t]he selective payment of rebates constitutes a felony under Ohio law,"49 the court did not hold that Duke had in fact paid 45 November 12, 2013 Discovery Dispute Conference Order, p. 3, Doc. 170, PageID 3383 (citing United States v. Zolin, 491 U.S. 554, 571 (1989)). 46 Id., p. 3, PageID 3385. 47 Id., p. 2, PageID 3384. 48 Zolin, 491 U.S. at 571. 49 Williams v. Duke Energy Int'l, Inc., 681 F.3d 788, 804 (6th Cir. 2012). 18 improper rebates, violated the law, or, as plaintiffs suggest, committed a felony. Defendants assert that all the Sixth Circuit did was recite what Ohio law provides. Moreover, defendants argue that the Ohio Revised Code sections that prohibit the selective payment of rebates apply only when the utility is providing "a like and contemporaneous service under substantially the same circumstances and conditions."50 The Supreme Court of Ohio has repeatedly interpreted these provisions as not prohibiting rate discrimination per se."51 [T]he statutes and case law do not require absolute uniformity in rates and prices; they allow utilities to charge different and unequal rates so long as there is some measurable difference in the furnishing of services."52 Rather, defendants maintain, the statutes prohibit "charging different rates when the utility is performing 'a like and contemporaneous service under substantially the same circumstances and conditions."'53 The U.S. Supreme Court made clear in Clark that ''this conception of the privilege"-that "a mere charge of illegality, not supported by any evidence, will set the confidences free"--is "'absurd."'54 Defendants argue that the only proof plaintiffs offer for the central allegation in their complaint can be summarized as follows: • While being deposed, a lawyer for the Ohio Hospital Association, Rick 50 51 See Ohio Rev. Code Ann.§ 4905.33(A) See, e.g., AK Steel Corp. v. PUCO, 95 Ohio State 3d 81, 86-87 (Ohio S.Ct. 2002). 52 DiFranco v. FirstEnergy Corp., 134 Ohio State 3d 144, 153 (Ohio S.Ct. 2012). 53 AK Steel Corp., 95 Ohio State 3d at 86-87. 54 Clark, 289 U.S. at 15 (citations omitted). 19 Sites, referred to the option payments as a rebate.55 • In an unauthenticated email purportedly produced in discovery, somebody named Rich Hertlein, at an organization that plaintiffs assert (without evidentiary support) is a member of the Ohio Hospital Association, referred to the option payment as a "rebate".56 • In an undated, untitled, redacted, and unauthenticated document purportedly produced in discovery, an unknown person, purportedly an agent or employee of General Electric Aircraft Engines, referred to something otherwise unidentified as a "CG&E Rebate".57 • In a documents defendants produced in discovery there is one-page breaking out the components of the "CRS Option Payment for First Quarter 2006" for Christ Hospital that bears the heading “Electric Rebate".58 Defendant argues that the use of the word ''rebate" in a handful of documents is a far cry from a prima facie showing that a serious crime or fraud occurred or that attorney-client communications were used to facilitate any crime or fraud. As to the obstruction of justice claim, defendants assert that plaintiffs presented only two pieces of supporting evidence: • During an April 25, 2006 oral argument before the Supreme Court of Ohio, Duke lawyer Paul Colbert denied knowing of any side agreements.59 • In the Deeds case and this case, Duke has strained to characterize the 55 Plaintiffs' January 10, 2014 Motion to Compel, p. 11, PageID 3564 (citing doc. 159-2, at 130 and 186-87). 56 Id. (citing doc. 159-4)(“It is also my understanding that the CG&E bills will continue to be sent to the same addresses as they are now, and that the CRES quarterly rebate check will be sent to me, as addressed above. Thanks, Rich Hertlein”). 57 Id., pp. 11-12, PageID 3564-65 (citing doc. 159-5). 58 Id., p. 12, PageID 3565 (citing doc. 159-6). 59 Id., p. 9, PageID 3562 (citing doc. 57, p. 4 (Statement by Colbert: “[I]t is unknown whether there were any [side agreements] in this case.” 20 “option payments” as something other than rebates and the agreements providing for them as legitimate business transactions rather than kickbacks.60 Defendants assert that plaintiffs misrepresent attorney Paul Colbert's statements to the Supreme Court of Ohio. During oral argument, Mr. Colbert stated: I would like to point out that, indeed, there's no effect of any alleged side deals - and of course, because there was no discovery, uh, it is unknown whether there were any in this particular case- but the ... there's no effect on customers, whether we had side deals with those customers or not. The same market prices, approved by the Commission, have to be in place for all of the customers.61 Duke argues that Colbert did not ''blatant[ly] lie to the Supreme Court of Ohio" or "den[y] knowing of any side agreements"62; he simply offered a parenthetical comment that the existence of such side agreements was not in the record, which was an absolutely true statement. Rick Sites testified at deposition: "Well--as I understand what Paul Colbert said--he put it in the context of the lack of discovery. So to the extent his answer to that was based on the fact that nothing had been discovered in the case for which he was making oral argument, it wouldn't be untrue."63 60 Id. at 9-10, PageID 3562-63 61 See Ohio Consumer's Counsel v. Public Utils. Comm 'n of Ohio, Case No. 2005-0946, Oral Argument (Apr. 25, 2006) (available at http://www.ohiochannel.org/MediaLibrary /Media.aspx?fileld=119568). 62 Plaintiffs’ January 10, 2014 Motion to Compel, p. 9, doc. 175, PageID 3562. 63 Sites Dep. pp. 184-85, Doc. 159-2, PageID 3058-59.) 21 As to the argument that Duke has strained to characterize the payments as legitimate business transactions, defendants maintain that plaintiffs have produced no evidence that the option payments were not legitimate business transactions. Defendants argue that The Sixth Circuit employs an eight-factor test: (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, ( 4) made in confidence ( 5) by the client, ( 6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) unless the protection is waived. Reed v. Baxter, 134 F.3d 351,355-56 (6th Cir. 1998) (citing Fausek v. White, 965 F.2d 126, 129 (6th Cir. 1992). Defendants’ February 18, 2014 motion to strike (doc. 180). Defendants move to strike the affidavits of Jonathan W. Marshall64 and Kent Marcum65 that were attached to plaintiffs’ February 14, 2014 reply brief (doc. 179) in support of their motion to compel. Defendants argue that the affidavits were submitted in violation of S.D. Ohio Civ. Rule 7.2(d), which provides, in relevant part: . . . all evidence then available shall be discussed in, and submitted no later than, the primary memorandum of the party relying upon such evidence. Evidence used to support a reply memorandum shall be limited to that needed to rebut the positions argued in memoranda in opposition. Defendants argue that the affidavits could easily have been submitted with the motion to compel. Further, defendants argue that neither affidavit contains admissible evidence. Plaintiffs contend that the affidavits address arguments made by defendants in their 64 Doc. 179-5, PageID 3765-67. 65 Doc. 179-6, PageID 3769-70. 22 memorandum in opposition to the motion to compel. The arguments the affidavits support were made by plaintiffs in their initial brief supporting their motion to compel and countered by arguments in defendants’ memorandum contra. Defendants did cite testimony and evidence to support their arguments, but these arguments did not raise new issues. Plaintiffs should have offered all the evidence supporting their arguments in their initial brief. Further, the affidavits state opinions about legal principles. They are not evidence, and the legal arguments they make are better made by briefs. For these reasons, defendants’ February 18, 2014 motion to strike (doc. 180) is GRANTED. Crime-fraud exception: Decision. Plaintiffs have failed to offer evidence that defendants sought the advice of counsel with the intention of committing a crime or a fraud. Assuming, without deciding, that plaintiffs may ultimately be able to prove the fraud/crime claims the Sixth Circuit held are actionable–a fact that is not established by the Court of Appeals’ decision and for which plaintiffs offer no evidence in support of their motion to compel–plaintiffs have offered no evidence that the purpose of the communications between defendants’ business employees and their in-house counsel was to facilitate the commission of a crime or a fraud. When deciding what course of business action to take, a company is not governed by considerations of fairness or morality. Justice Holmes’ “bad man” theory of the law posits that clients consult their lawyers to obtain a prediction “of what the courts will do 23 in fact . . . .”66 Here it appears that defendants consulted with their in-house lawyers about the legal consequences of the options agreements they ultimately entered with the large electricity users who opposed CG&E’s January 26, 2004 proposed RSP. Assuming, as plaintiffs assert, that CG&E’s lawyers advised them to enter those agreements, their supposed prediction that those agreements did not violate the law67 would not amount to a crime or fraud that destroys the attorney-client privilege. There is a difference between going to a lawyer and asking the lawyer to tell you whether the course of action you want to pursue is arguably within the limits of what the law permits and going to a lawyer and asking the lawyer to assist you in violating the law or to show you how to violate the law. Here plaintiffs have offered no evidence, direct or circumstantial, that suggests defendants took the latter course when they consulted with in-house counsel about the options agreements. Plaintiffs also argue that Paul Colbert committed a crime or a fraud by telling the Supreme Court of Ohio during an April 25, 2006 oral argument that there were no side agreements. Whether that is so or not depends on facts already known to plaintiffs. There is a recording of the oral argument, and plaintiffs have taken discovery about the agreements with the large electricity customers. They have those agreements and the testimony of those involved in creating and executing them. Further, plaintiffs have offered no facts demonstrating, or even suggesting, that the 66 Holmes, “The Path of the Law”, 10 Harv. L. Rev. 457, 460-61 (1897). 67 Plaintiffs have not proffered a scintilla of evidence that CG&E’s lawyers advised defendants that the agreements were illegal. 24 email communications at issue in this discovery dispute would in any way provide further, non-cumulative support for their argument that Colbert committed a fraud on the Supreme Court of Ohio. To the extent that plaintiffs may be arguing that defendants must have committed a crime or fraud because Colbert’s lack of frankness in his response to a question during oral argument suggests Duke had something to hide, the inference is too slender and built on supposition rather than fact. The options agreements were not of record in the PUCO proceedings. Colbert did not assert that there were no side agreements. He did argue that if there were, they would have no impact because “[t]he same market prices, approved by the Commission, have to be in place for all of the customers.” That statement could be viewed as misleading, although an experienced judge would not likely be mislead. And, in fact, the Supreme Court of Ohio’s decision remanded with directions that Duke had to produce the side agreements.68 In short, plaintiffs have not met their burden of making a factual showing adequate to support a good faith belief that an in camera review would reveal evidence that would establish the crime-fraud exception. IV. Attorney-client privilege: Background to documents In 1999, the Ohio General Assembly passed Amended Substitute Senate Bill No.3 ("S.B. 3"). It gave consumers the ability to select their electric generation service provid- 68 Ohio Consumers' Counsel v. PUCO, 111 Ohio State 3d 300, 319-20 (Ohio S.Ct. 2006). 25 ers.69 S.B. 3 also established a "market development period," from 2001 to 2005, during which electric utilities' rates were frozen.70 Once the market development period ended, PUCO’s authority to set electricity rates was to end. On January 10, 2003, CG&E filed its Market Based Standard Service Plan (“MBSSO”) application asking PUCO to establish market-based rates for non-residential end-use customers after the market development period.71 The Commission, concerned that an immediate shift to market-based rates would not be in customers' best interests, invited CG&E to file a ''rate stabilization plan" ("RSP") in lieu of the MBSSO, which it did on January 26, 2004.72 Certain parties had objected to CG&E's original application but agreed to move away from CG&E as their electricity supplier to Cinergy Retail Sales, LLC ("CRS"), a PUCO-certified Competitive Retail Electric Service ("CRES") provider and CG&E affiliate.73 As part of that agreement, those parties agreed not pursue their objections to CG&E's application. On May 19, 2004, CG&E filed a stipulation co-signed by the Com- 69 Ohio Rev. Code Ann.§ 4928.02. 70 Ohio Rev. Code Ann.§§ 4928.35 and 4928.40. 71 In the Matter of the Application of the Cincinnati Gas & Elec. Co. to Modify its NonResidential Generation Rates to Provide for Market-Based Standard Serv. Offer Pricing and to Establish a Pilot Alternative Competitively-Bid Serv. Rate Option Subsequent to Market Dev. Period, PUCO Case No. 03-93-EL-ATA ("In re CG&E RSP''), Summary of Application, at 1 (Jan. 10, 2003); Johnson Decl., ¶ 11, Doc. 175-2, PageID 3635. 72 See In re CG&E RSP, CG&E's Filing in Response to the Req. of the PUCO to File a Rate Stabilization Plan, at 4 (Jan. 26, 2004); Johnson Decl., ¶ 13. 73 In fact, CG&E never asked PUCO to certify CRS as a CRES provider. 26 mission's staff and ten other organizations, including some of the objectors, which recommended that the PUCO adopt an RSP with specified customer charges, cost recovery ''riders," and cost "trackers."74 During hearings the next day, the Ohio Consumers' Counsel ("OCC") moved to compel CG&E to produce alleged "side agreements" that the OCC claimed related to the stipulation.75 The hearing examiner denied the motion.76 On September 29, 2004, PUCO approved the stipulation, but with modifications.77 On November 23, 2004, after several other parties filed applications for rehearing, PUCO issued a new entry adopting in part an alternative rate proposal proposed by CG&E.78 Because the stipulation was modified by PUCO, first in September and subsequently in December, 2004, the agreements with CRS, by their terms, became void. Nonetheless, CRS agreed to enter into separate "option agreements" with the same parties that called for those parties to switch to CRS if the market fell to a certain competitive price level, in return for option payments.79 In March 2005, the OCC appealed to the Supreme Court of Ohio. Oral argument was held on April 26, 2006. On November 22, 2006, the Court issued an opinion affirming 74 In re CG&E RSP, Stipulation and Recommendation (May 19, 2004). 75 Ohio Consumers' Counsel v. PUCO, 111 Ohio State 3d 300, 301, 319 (Ohio S.Ct. 2006). 76 Id. 77 In re CG&E RSP, Op. and Order (Sept. 29, 2004). 78 In re CG&E RSP, Entry on Reh'g (Nov. 23, 2004). 79 See Second Am.Compl. at ¶¶19-20; see also Pls.' Mot. to Compel at 2. 27 in part and reversing in part PUCO's decision. While it rejected most of the OCC's arguments, the Court held that the Commission could not rely on the stipulation without determining whether it was the product of "serious bargaining." Holding that any "side agreements" could be relevant to this issue, the Supreme Court remanded with instructions to allow discovery of the requested information.80 After the Supreme Court's remand, the OCC broadened its discovery requests to include the option agreements.81 On January 2, 2007, the hearing examiner ordered that the agreements be produced.82 On October 24, 2007, PUCO issued an order rejecting the May 2004 stipulation in its entirety and reconsidering CG&E's original RSP application.83 Concluding that the agreements signed after the Commission's November 23, 2004 Entry on Rehearing (which included the option agreements) were "irrelevant to [the] proceeding,"84 PUCO approved, with some modifications, CG&E's original RSP.85 These orders were the subject of the OCC's second appeal to the Supreme Court of Ohio. The Supreme Court affirmed, upholding PUCO's rulings on the side agreements and dismissing the appeal of the RSP rates as moot because the RSP had expired and been replaced with a new rate structure approv- 80 Ohio Consumers' Counsel, 111 Ohio State 3d at 319-20. 81 Ohio Consumers' Counsel v. Pub. Utils. Comm 'n, 121 Ohio State 3d 362, 363 (Ohio S.Ct. 2009). 82 In re CG&E RSP, Entry, ¶¶ 4 and 11 (Jan. 2, 2007). 83 In re CG&E RSP, Order on Remand, at 28 (Oct. 24, 2007). 84 85 Id. at 26. See In re CG&E RSP, Entry on Reh'g (Dec. 19, 2007). 28 ed by PUCO.86. The Deeds Case. In December 2006, a former Duke employee named John Deeds filed a whistleblower action in the United States District Court for the Southern District of Ohio against Duke Energy Corporation and Duke Energy Retail Sales, LLC.87 Deeds was represented by, among other attorneys, plaintiffs' counsel Randolph H. Freking. The federal action was dismissed for lack of subject matter jurisdiction, and Deeds re-filed in the Court of Common Pleas for Hamilton County, Ohio.88 In the state Deeds action, Deeds accused Duke of ''threatening, firing, and harassing [him for] refus[ing] to go along with and then reveal[ing]" the option agreements.89 That action was settled.90 V. Attorney-client privilege: Decision Defendants’ claims of privilege and work product protection. Ariane S. Johnson, Associate General Counsel, Duke Energy Business Services, Inc., reviewed the documents withheld as privileged or entitled to work product protection and grouped them into 13 86 See generally Ohio Consumers' Counsel, 121 Ohio State 3d at 365-66. 87 Deeds v. Duke Energy Corp., Case No. 1:06-cv-00835; Johnson Decl., ¶ 23, Doc. 175-2, PageID 3637. 88 Deeds v. Duke Energy, Case No. A 0701671. 89 Plaintiffs’ August 14, 2006 Memorandum in Opposition to Defendants’ Motion to Dismiss, p. 41, Doc. 47, PageID 690. 90 See Hamilton County Clerk of Courts, Case Summary, http://www.courtclerk. org/case summary.asp?sec=history &casenumber=A0701671. 29 categories. This decision will discuss the withheld documents by reference to the categories in Ms. Johnson's December 17, 2013 declaration. Following the description of each category, a document number for each document withheld in that category and a description of each document are set out.91 Category A: [A] series of emails among counsel, copying clients such as Gainer, Ficke, and Steffen. In the emails, the lawyers discuss the legal implications of undertaking certain steps following a decision by the PUCO. These communications also focus on the legal issues that might arise as a matter of contract law under certain scenarios.92 Defendants’ claim of privilege: Internal discussion among lawyers (cc'ing clients) strategizing about decisions following rulings by PUCO in the RSP case; attorney work product, containing legal analysis and mental impressions.93 Documents94 (14 emails sent on December 6 and 7, 2004): • Email numbers95 1-6, 356-60, and 369 sent December 7, 2004, Re: new plan- confidential, (among 10 lawyers and non-lawyers) • 394-December 6, 2007 email from CG&E’s Vice President for Regulatory and Legislative Strategy James Gainer to CG&E employees Timothy Duff, Jim Ziolkoski, and John Finnigan and in-house lawyer Paul Colbert (Colbert is the only lawyer) 91 The categories and the general description of the documents contained in each category are taken from Ariane S. Johnson's December 17, 2013 Declaration, pp. 9-12, ¶¶ 30-31, Doc. 176-2, PageID 3638-40. The document numbers are set out in Ms. Johnson's Declaration and are taken from defendants' privilege log. Doc. 175-1, PageID 3592-3627. 92 Johnson Decl., ¶ 31, PageID 3639. 93 Id., ¶ 30, Table, PageID 3638. 94 Following a bullet for each document/set of documents is the document number, date, sender, recipient(s), and subject line. 95 The withheld email numbers are the document numbers in the left-most column of defendant’s privilege log. Doc. 175-1, PageID 3592-3628. 30 • 395–December 6, 2004 email from Paul Colbert to in-house lawyer Kate Moriarty and James Gainer, Timothy Duff, and Jim Ziolkowski New plan -confidential," 12-6-2004 & 12-7-2004 (among 10 lawyers and non-lawyers) Background facts related to these emails. On November 23,2004, PUCO issued and Entry on Rehearing modifying CG&E’s Rate Stabilization Plan. The first December 6, 2004 email (No. 394) was sent by James Gainer,96 CG&E’s Vice President for Regulatory and Legislative Strategy, to Jim Ziolkowski, an analyst in the Rate Department,97 CG&E employee Tim Duff, and two in-house attorneys, John Finnigan98 and Paul Colbert. Copied on the email were CG&E’s Vice President for Rates Jack Steffen, , CG&E’s President Greg Ficke, CG&E employee Jason Barker,99 and Kate Moriarty, an attorney who worked for Gainer.100 Eleven of the emails are authored by a lawyer: Finnigan (Nos. 2, 4, 357, and 369), Colbert (Nos. 356, 358, and 395), or Moriarty (Nos. 1, 3, 6, and 360). Two emails (Nos. 5 and 359) are authored by Steffen. The privilege log describes all of these emails as “correspondence regarding RSP settlement and CRES contracts.”101 Johnson states in her Dec- 96 Gainer testified that he "functioned as a lawyer in [connection with the option agreements], and business people would have done that kind of analysis [who benefited from the options] you're suggesting." Gainer Dep., 121, Doc. 179-2, PageID 3750. 97 Gainer Dep., 117, Doc. 179-2, PageID 3749. 98 Described by Gainer as "an attorney that worked for me". Gainer Dep., 117, Doc. 179-2, PageID 3749. 99 Not identified in Johnson’s declaration. Johnson Decl. ¶ 24; Doc. 175-2, ¶¶ 10 and 24, PageID 3631-32 and 3637. 100 Gainer Dep., 117, Doc. 179-2, PageID 3749. 101 Johnson Decl., ¶ 31, Doc. 175-2, PageID 3639. 31 laration: “In the emails, the lawyers discuss the legal implications of undertaking certain steps following a decision by PUCO. These communications also focus on the legal issues that might arise as a matter of contract law under certain scenarios.”102 Plaintiffs argue that these emails were sent just prior to the execution of the side agreements that provided for illegal selective rebates.103 They maintain that the “new plan” led to the "option agreements" through which CG&E paid illegal rebates over a period of at least four years. To support this argument, plaintiffs first point to Jim Ziolkowski's May 11, 2006 email outlining "the history behind the so-called 'CRES' payments".104 In late 2003, electric investor-owned utilities were still transitioning to market-based pricing. They were still in a Market Development Period that followed the January 2001 implementation of electric Customer Choice. During that period, electric rates were frozen. The Market Development Period had been scheduled to end December 31, 2005. "By 2003, the PUCO . . . became concerned that the competitive electric retail market in Ohio was not sufficiently robust to prevent wild price swings under pure competition and market pricing. . . . As a result, they asked the utilities to offer Rate Stabilization Plans in lieu of pure market pricing."105 In response, during the first half of 2004, CG&E filed a Rate Stabilization Plan 102 Id. 103 See Williams, 681 F.3d at 804. 104 Doc. 179-1, PageID 3746. 105 Id. 32 ("RSP"). A number of large customers, represented by industry groups, intervened. CG&E's goal was to obtain rapid approval of the RSP. "The interveners represented a roadblock, however. To eliminate this roadblock and prevent a formal hearing, CG&E negotiated special conditions with the interveners and ultimately reached agreements with them."106 The original agreement with the interveners provided that Cinergy would form a Certified Retail Electric Supplier ("CRES")107 that would supply electricity at contractually agreed rates. But "at the last minute", December 2004, "Cinergy's top management decided that the CRES settlement was too risky, and Cinergy essentially decided to not follow through with the contract. To prevent lawsuits for breach of contract, Cinergy entered into negotiations with each of the parties and agreed to make monthly or quarterly payments in lieu of offering generation service from the CRES."108 These contracts with the industry groups generally provided that "the customers belonging to [a] group [would] receive refunds of various RSP riders."109 Ziolkowski prepared statements showing the amounts to be refunded to each customer, then Cinergy paid those amounts to the customers out of 106 Id. 107 Paul Colbert testified that in Ohio "a CRES is a certified supplier of competitive retail electric services, where the certification is made by the Public Utilities Commission upon application by the supplier. And they're authorized to provide limited and very specific types of--of services, primarily the sale of generation." 108 Id. 109 Id. 33 "the CBU's110 (non-regulated generation) budget."111 The payments were to continue through December 2008. They totaled about $22,000,000 a year because they included "some of the largest retail customers in the service territory: AK Steel, Procter & Gamble, General Electric, Ford, Ashland/Marathon, all of the hospitals, and others."112 Next plaintiffs point to James Gainer's deposition. In December 2004, he was CG&E’s Vice President for Regulatory and Legislative Strategy. He testified that there were option agreements that "gave the CRES an option to serve those customers in return for a payment."113 He did not recall the reasons for switching from the agreement negotiated in November 2004 to the option agreements.114 He described it as a management decision that he did not know had anything to do with PUCO's order.115 He believed the company could have kept the November 2004 agreement rather than negotiate the option agreements.116 Gainer further testified that he consulted with Rogers (the ultimate decision-maker), Ficke, Steffen, Manly, and Cyrus about the Option Agreements.117 One 110 Gainer testified that the Commercial Business Unit was responsible for calculating the value of the option agreements to Cinergy. Gainer Dep., 120, Doc. 179-2, PageID 3749. 111 Id. 112 Id. 113 Gainer Dep., 118, Doc. 179-2, PageID 3749. 114 Id., 118-19. 115 Id., 119. 116 Id., 126, PageID 3751. 117 Id., 119-20, PageID 3749. 34 purpose of the option agreements may have been to fulfill the commitment Cinergy made in May and November 2004 to the interveners opposing Cinergy's RSP pending before PUCO.118 Gainer acknowledged that CG&E had an agreement with the 22 large customers "to negotiate in good faith to try to put the parties back in the same economic position.119 However, Gainer insisted that the decision to negotiate option agreements was a management decision, and his participation in that process was as a lawyer, albeit one whose office was Cinergy's Vice President of Legislative and Regulatory matters with direct supervisory authority over the Rate Department.120 Paul Colbert testified in his deposition in the Deeds case121 that there were no contracts that Cinergy Retail Services ("CRS") had that had been termed a settlement agreement.122 Cinergy never formed a CRES in connection with its RSP.123 However, he further testified that all the interveners supported their May 2004 "settlement [with Cinergy], which resolved the RSP."124 Colbert further testified that negotiation of the options agreements began in Dec- 118 Id., 121-23, PageID 3750. 119 Id., 126, PageID 3751. 120 Id., 124-25. 121 John Deeds v. Duke Energy/Duke Energy, Ohio Inc., et al., Case No. A0701671 (Hamilton Cty.C.P.Ct. February 8, 2008). 122 Colbert Dep., 65, Doc. 179-3, PageID 3755. 123 Id., 95, PageID 3757. 124 Id., 116, PageID 3760. 35 ember 2004 after PUCO's final order in the RSP case.125 The options agreements were negotiated with customers who intervened in the RSP case or were members of an association that intervened in that case.126 Plaintiffs assert that defendants' argument that the option agreements related to PUCO's order in the RSP case and to CG&E's legal strategy for dealing with it runs counter to Gainer's testimony: "You know, I think it was a management decision. I don't know it had anything to do with the Commission's order."127 Plaintiff argues that these facts demonstrate that what occurred in December 2004 related to a business decision rather than to any legal strategy in the RSP case, in which PUCO issued its final order in November. Consequently, plaintiff contends that defendants have failed to prove that the December 6 and 7 emails were attorney-client communications. While plaintiffs correctly assert that the decision about of how to implement their agreement with the large electricity users who objected to CG&E’s January 26, 2004 proposed RSP is a business decision, that does not shed any light on the question of whether these emails were attorney-client communications. When making business decisions, companies frequently consult with their in-house lawyers about the legal implications of the options they are considering. Here CG&E had an agreement and it was considering whether to modify it. One important purpose in entering contracts is to insure that if they 125 Id., 110, PageID 3759. 126 Id., 113-14, PageID 3759-60. 127 Id., 119, PageID 3749. 36 are breached there is a remedy at law. Consequently, it is prudent to consult your lawyer before modifying or entering a contract. Turning to the question of whether defendants have offered facts sufficient to demonstrate that the emails were attorney-client communications, Johnson’s assertion in her declaration is that the Category A emails are “ a series of emails among counsel” that “discuss the legal implications of undertaking certain steps following a decision by the PUCO” and “the legal issues that might arise as a matter of contract law under certain scenarios.”128 These “facts” are too skeletal for me to determine whether these emails were attorney-client communications. First, the emails do not appear to be a “series of emails among counsel . . . .” The first email in the series was sent by CG&E’s Vice President for Regulatory and Legislative Strategy James Gainer to an analyst in the Rate Department, another employee and two in-house counsel. Two other emails were authored by CG&E’s Vice President for Rates Jack Steffen. Even the eleven emails authored by a lawyer were sent to as many non-lawyers as lawyers. Second, the subject matter of the emails is insufficiently described to determine whether these emails sought/contained legal advice. The PUCO decision about which advice was allegedly sought is not identified, nor is the nature of the advice sought. What contract(s) the emails might relate to is not identified. Defendants have done little more than to invoke the words “ attorney-client privilege” without offering any supporting facts. It is ORDERED that on or before August 22, 2014 defendants provide an affidavit 128 Johnson Decl., ¶ 31, PageID 3639. 37 from James Gainer, Jack Steffan, Jim Ziolkowski, John Finnigan, and Paul Colbert stating the factual predicates for the claims of attorney-client privilege, including who sought legal advice, which PUCO decision(s) are discussed in the emails, whether the discussions were about the business and/or legal implications of the ruling(s), the purpose(s) of the emails authored by non-lawyers, and whether the contract issues related to the large customers/industry groups CS&G entered contracts with after they intervened in the PUCO proposed RSP proceeding and/or the contracts entered with those customers in or after December 2004. Alternatively, defendants may submit those emails for in camera review. Category B: Items 10-11 are an internal discussion between attorneys and clients regarding settlement proposals in the MBSSO case in 2007. Defendants' Claim of Privilege: Internal discussions about settlement strategy in MBSSO case, which occurred in 2007, after the RSP. Documents: • 10–May 4, 2007 email from in-house lawyer Paul Colbert to David Celona,129 Amended MBSSO settlement proposal for parties • 11–May 21, 2007 email from Colbert to Caldwell, Sandra Meyer, Celona, Smith, Barry W. Wood,130 5-21-07, Amended MBSSO settlement Plaintiffs do not discuss Category B in either their motion to compel or their reply brief. Johnson’s December 17, 2013 Declaration states that the emails “are internal discussions between attorneys and clients regarding settlement proposals in the MBSSO case 129 Not identified in the Johnson Declaration. Johnson Decl. ¶ 24; Doc. 175-2, ¶¶ 10 and 24, PageID 3631-32 and 3637. 130 Not identified in the Johnson Declaration. 38 in 2007.”131 The privilege log identifies the two May 2007 emails as “communications containing confidential A/C communications and attorney work product regarding settlement of RSP case.”132 The May 14, 2007 email was from in-house lawyer Paul Colbert to David Celona, a Duke employee whose job duties are not identified in the Johnson Declaration.133 The May 21, 2007 email was sent by Colbert to Myron Caldwell, apparently a Duke employee although his job duties are not identified, Sandra P. Meyer, who became president of Duke Energy Ohio after CS&G’s merger with Duke in 2006, David Celona, Paul Smith, who following the merger was Vice President of Rates in Ohio, and Barry W. Wood, Jr., whose position also was not identified by defendants. Defendants have offered sufficient evidence to support their claim of attorneyclient privilege, and plaintiffs have offered no evidence that a purpose of the attorneyclient communications was to assist the client in committing a crime or a fraud. Category C: [C]ommunications between clients and their attorney(s) in which settlement proposals relating to RSP settlement are discussed internally only; that is, none of these communications are with outside parties. These communications contain drafts for attorney review and comment in connection with a meeting in which settlement proposals are to be discussed. The drafts are also prepared at the request of counsel and constitute work product.134 Defendants' Claim of Privilege: Client seeking advice of counsel and communication with other clients re RSP settlement, including 131 Johnson Decl., ¶ 31, PageID 3639. 132 Doc. 175-1, PageID 3592. 133 Id.; Johnson Decl. ¶ 24; Doc. 175-2, ¶¶ 10 and 24, PageID 3631-32 and 3637. 134 Id., ¶ 31, PageID 3639. 39 with Kroger.135 Documents: • 40--January 13, 2006 email from in-house lawyer Michael Pahutski136 to in-house lawyer Paul Colbert, Kroger, Constellation, New Energy137 • 51–September 16, 2014 email from Norma Bales,138 Updated: RSP Option pre-order issuance meeting139 • 52–September 21, 2014 email from Vice President Regulatory and Legislative Strategy James Gainer to Michael Cyrus,140 CG&E President Greg Ficke,141 Vice President for Rates Jack Steffen,142 inhouse lawyer Paul Colbert, and Jim Turner,143 RSP options.doc144 (of addressees, only Colbert is an attorney) • 53–September 15, 2014 email from James Gainer to Steve Schrader,145 CG&E President Greg Ficke, Vice President for Rates Jack Steffen, Paul Colbert, Michael Cyrus,146 RSP options.eml147 (of addressees, only Colbert is an attorney) • 54–Apparently undated email from Gainer to Schrader, Ficke, 135 Id., ¶ 30, Table, PageID 3638. 136 Michael Phutski was a Duke in-house lawyer. His job title was Senior Counsel. He later became Associate General Counsel. Johnson Decl. ¶ 10, Table, PageID 3634. 137 Doc. 175-1, PageID 3595. 138 Ms. Bales was an executive administrative assistant. Id., PageID 3635. 139 Doc. 175-1, PageID 3596. 140 Not identified in the Johnson Declaration. 141 Greg Ficke was President of CG&E. Id., ¶ 17, PageID 3636. 142 Id., ¶ 17, PageID 3636 143 Not identified in the Johnson Declaration. 144 Doc. 175-1, PageID 3596. 145 Not identified in the Johnson Declaration. 146 Not identified in the Johnson Declaration. 147 Doc. 175-1, PageID 3596. 40 • • • • • Steffen, Colbert, and Cyrus, ERRSP Settlement Summary.doc148 55–September 30, 2004 email from Gainer to Ficke, Steffen, Bales, Colbert, Meeting with Boehm and Kurtz149 56–November 30, 2004 email from Suzanee Kesling150 to Colbert, Dan Jones,151 Michael McClaine,152 Karen Wallace,153 Leigh Pefley,154 Ficke, Tiffany Moore,155 and Suzanne Kesling,156 Special Contracts (Previous Choice Agreements and New ERRSP Agreements)157 (of addressees, only Colbert is an attorney) 57–December 8, 2004 email from Gainer to Ficke, Steffen, Tim Duff,158 Colbert, Moriarty, and Gainer, Updated Meeting with Boehm and Kurtz159 121–July 9, 2007 email from Duke in-house lawyer Rocco D' Ascenzo160 to Duke Vice President for Rates in Ohio Paul Smith, Re: Contract Customers161 152–October 14, 2005 email from Gainer to Jim Turner162 and Chief 148 Id. 149 Id. 150 Not identified in the Johnson Declaration. 151 Not identified in the Johnson Declaration. 152 Not identified in the Johnson Declaration. 153 Not identified in the Johnson Declaration. 154 Not identified in the Johnson Declaration. 155 Not identified in the Johnson Declaration. 156 Ms. Kesling is identified as both the sender and as a recipient of the email. 157 Doc. 175-1, PageID 3596. 158 Not identified in the Johnson Declaration. 159 Doc. 175-1, PageID 3596. 160 Id., ¶ 10, Table, PageID 3633. 161 Doc. 175-1, PageID 3603. 162 Not identified in the Johnson Declaration. 41 • • • • • • • Legal Officer Marc Manly, Fw: Kroger Settlement Term Sheet(2).doc163 153–October 14, 2005 email from Steffen to Gainer, Re: Kroger Settlement Term Sheet(2).doc164 154–May 23, 2008 email from Colbert to Meyer, in-house lawyer John Finnigan,165 Duke Vice President for Rates in Ohio Paul Smith and Barry W. Wood,166 OEG contracts167 155–May 23, 2008 email from Smith to Colbert, Duke Ohio President Sandra Meyer, Finnigan, Barry W. Wood,168 and MyronCaldwell,169 OEG contracts170 182–October 14, 2005 email from Gainer to Steffen and Duff, Re: Kroger Settlement Term Sheet.doc171 194 –June 14, 2005, email from in-house lawyer Michael Pahutski to Renee Marko,172 Constellation NewEnergy- Kroger Extension173 211–December 14, 2005 email from Moriarty to Gainer, Re: All party stipulation draft with Cincy changes 12-13-05 (HO624371).DOC174 278–January 25, 2006 email from Vice President and General Counsel 163 Doc. 175-1, PageID 3606. 164 Doc. 175-1, PageID 3606. 165 Id., ¶ 10, Table, PageID 3634 166 Not identified in the Johnson Declaration. 167 Doc. 175-1, PageID 3606. 168 Not identified in the Johnson Declaration. 169 Not identified in the Johnson Declaration. 170 Doc. 175-1, PageID 3606. 171 Doc. 175-1, PageID 3608. 172 Not identified in the Johnson Declaration. 173 Doc. 175-1, PageID 3609. 174 Doc. 175-1, PageID 3610. 42 • • • • Jeff Gollomp175 to Greg Cecil,176 Chuck Whitlock, President of DERS (formerly CRS),177 Ficke, Gainer, Colbert, and Pahutski, Re: Guidance needed-KROGER178 331–July 25, 2007 email from Nanmada Nanjundan179 to Pahutski, RE: DERS Agreement180 393–September 4, 2004 email from Steffen to Barker, Gainer, Colbert and Duff, RE: CRS Rates - Draft #2 8-27-04(2).xis181 396–April 11, 2006 email from Duff to Ziolkowski, No subject indicated on privilege log.182 (Neither party is an attorney)(No one received copies) 397 –April 11, 2006 email from Duff to Ziolkowski, IEU Settlement 2006.xls183 (Neither party is an attorney) The facts offered to support the claim that this diverse collection of emails sent from December 2004 to May 2008 are attorney-client communications are insufficient for me to make a determination. Some of the authors of the emails are not identified. Many recipients are not identified. See, e.g., Doc. 56. The subject matter descriptions are often skeletal 175 Id., ¶ 10, Table, PageID 3635. 176 Not identified in the Johnson Declaration. 177 Id., ¶¶ 21 and 24, PageID 3636-37. 178 Doc. 175-1, PageID 3616. 179 Not identified in the Johnson Declaration. 180 Doc. 175-1, PageID 3620. 181 Doc. 175-1, PageID 3627. 182 The privilege log describes the document as an “E-mail regarding IEU settlement prepared in connection with then-pending PUCO proceedings”. Id. 183 Doc. 175-1, PageID 3628. The privilege log describes the document as a “[s]preadsheet regarding IEU Settlement prepared in connection with then-pending PUCO proceedings”. Id. It does not say that the spreadsheet was prepared at the direction of an attorney or for the purpose of obtaining legal advice as opposed to prepared as part of ongoing business operations. 43 and, ultimately, unhelpful. For example, Documents 396 and 397 are said to be emails containing communications about a settlement in connection with a PUCO proceeding, but there is no way for me to determine whether the communications are business communications or attorney-client communications. From the information available, but for the broad assertion in Johnson's declaration that the withheld documents are attorneyclient communications, it appears more likely that these emails are business communications between Duke business employees. It is ORDERED that on or before August 22, 2014 defendants provide an affidavit(s) from one or more of the recipients/ authors of the emails, which PUCO decision(s) are discussed in the emails, whether the discussions were about the business and/or legal implications of the ruling(s), the purpose(s) of the two emails authored by non-lawyers, whether the contract issues related to the large customers/industry groups CS&G entered contracts with after they intervened in the PUCO RSP proceeding and/or the contracts entered with those customers in or after December 2004. Alternatively, defendants may submit those emails for in camera review. Category D: [C]lient requests for advice and counsel input into drafts of materials pertaining to PUCO proceedings.184 Defendants' Claim of Privilege: Intemal discussion with clients about issues in regulatory filings having to do with RSP rehearing and/or extension of RSP in Ohio.185 Documents: • 9–October 31, 2007 email from Duke Enery Ohio President Sandra 184 Johnson Decl., ¶ 31, Doc. 175-2, PageID 3639. 185 Id., ¶ 30, Table, PageID 3638. 44 • • • • Meyer to in-house lawyer Paul Colbert, Fw: Ohio Update186 12–May 29, 2007 email from Colbert to Duke Group Executive and President Thomas O'Connor,187 Meyer, David Celona, and Vice President for Rates in Ohio Paul Smith, FW: OH Rate Stabilization Plan-Issue Brief188 13--May 29, 2007 email from Colbert to O'Connor, Meyer, Celona, and Smith, No subject indicated on privilege log189 38--March 5, 2007 email from Steve Brash190 to Barry W. Wood,191 Steffen, Smith and Colbert, Re: DERS contracts release192 325-- July 27, 2006 email from Vice President and General Counsel Jeff Gollomp to Lee Barrett,193 Phillip Grigsby,194 Curtis Davis,195 Chuck Whitlock, Fred W. Wiesen,196 and Paul H. Berry,197 Re: RSP 186 The privilege log describes this document as: "E-mail communication containing confidential A/C communications and attorney work product on rehearing of RSP case before the PUCO". Doc. 175-1, PageID 3592. 187 Id., ¶ 19, PageID 3636. 188 The privilege log says this document is an: "E-mail forwarding redline comments on issue brief regarding RSP settlement proposal". Doc. 175-1, PageID 3592. 189 The privilege log says this document contains: "Redline comments on draft issue brief regarding RSP settlement proposal”. Doc. 175-1, PageID 3592. 190 Not identified in the Johnson Declaration. 191 Not identified in the Johnson Declaration. 192 The privilege log says this document contains: "E-mail communications containing confidential A/C communications and attorney work product regarding release of option agreements in PUCO proceedings". Doc. 175-1, PageID 3595. 193 Not identified in the Johnson Declaration. 194 Not identified in the Johnson Declaration. 195 Not identified in the Johnson Declaration. 196 Not identified in the Johnson Declaration. 197 Not identified in the Johnson Declaration. 45 Update Meeting198 Documents 9, 12 and 13 are protected by the attorney-client privilege. The author of Doc. 38 is not identified by Johnson's declaration and only one of the four recipients is identified as a lawyer. Only one of the six recipients of Doc. 325 is identified. On or before August 22, 2014, defendants are ORDERED to either provide additional facts supporting the claim of attorney-client privilege as to these documents or submit them for in camera review. Category E: This category pertains to a settlement executed prior to the RSP in which the client is seeking or counsel is providing advice regarding the requirements of the settlement. Documents that were not privileged have been produced.199 Defendants' Claim of Privilege: Attorney-Client communications regarding settlement in case prior to the RSP case (ETP case).200 Documents: • 25–May 23, 2008 email from in-house lawyer Paul Colbert to Duke Ohio President Sandra Meyer, in-house lawyer John Finnigan, Vice President for Rates in Ohio Paul Smith, and Barry W. Wood,201 OEG Contracts202 • 26–May 23, 2008 email from Paul Smith to Colbert, Meyer, Finnigan, 198 The privilege log says this document is a"Confidential e-mail regarding meeting on RSP proceedings before PUCO". Doc. 175-1, PageID 3620. 199 Johnson Decl., ¶ 31, Doc. 175-2, PageID 3639. 200 Id., ¶ 30, Table, PageID 3638. 201 Not identified in the Johnson Declaration. 202 Docs. 25-28 are described in the privilege log as “E-mail communications containing legal advice on May 8, 2000 settlement entered in PUCO transition case”. Doc. 175-1, PageID 3594. 46 Barry W. Wood,203 and Myron Caldwell, RE: OEG Contracts • 27–May 23, 2008 email from Sandra Meyer to Smith, Colbert, Finnigan, Wood, and Caldwell, RE: OEG Contracts • 28–May 23, 2008 email from Colbert to Meyer, Smith, Finnigan, Wood, and Caldwell, ORE: EG Contracts • 156-- May 4, 2009 email from Paul Smith to Amy B. Spiller204, Tim Duff,205 and Jim Ziolkowski, Option Contract Payments206 Johnson’s declaration states that these emails are “[a]ttorney-client communications regarding settlement in case prior to the RSP case (ETP case).”207 Defendants have made an adequate showing that these emails were attorney-client communications about a May 2008 settlement in a PUCO transition case. Category F: [D]ocuments prepared by counsel in connection with the RSP case. These documents were prepared for counsel's use as summary outlines of certain settlement proposals and are work product.208 Defendants' Claim of Privilege: Work Product and counsel mental impressions regarding RSP and/or RSP settlement proposals.209 Documents: • 35-March 2, 2007 email from Vice President for State and Federal Regulation, Legal Kodwo Ghartley-Tague to in-house lawyers Paul Colbert, John Finnigan, and Rocco D' Ascenzo, and Paul R. New- 203 Not identified in the Johnson Declaration. 204 Although the Johnson declaration does not otherwise identify Spiller, she is listed among “Attorneys Involved” in ¶ 30, Table, PageID 3638. 205 Merely described as one of several “other employees”. Id., ¶ 24, PageID 3637 206 The privilege log describes the document as a “Confidential e-mail regarding option agreements with OEG members”. Doc. 175-1, PageID 3606. 207 Johnson Decl. ¶ 30, PageID 3638. 208 Johnson Decl., ¶ 31, PageID 3640. 209 Id., ¶ 30, Table, PageID 3638. 47 • • • • ton,210 Re: 5 toughest questions211 350-354–Are said to have been authored by in-house lawyer Paul Colbert in 2007.212 There is no indication in the privilege log that they were ever distributed to anyone. 364-366 and 368–Are said to have been authored by in-house lawyer Paul Colbert in 2005.213 There is no indication in the privilege log that they were ever distributed to anyone. 372--April 19, 2004 email from in-house lawyers Paul Colbert and John Finnigan to in-house lawyers Jim Bolin, Jeff Gollomp, Marc Manly, and Michael Pahutski and an unidentified recipient, Kay Pashos, Legal and regulatory risks related to power sales by CG&E affiliated CRES provider as part of CG&E' s proposed settlement of its ERRSP case214 373–April 16, 2004 email from in-house lawyers Paul Colbert and John Finnigan to in-house lawyers Jim Bolin, Jeff Gollomp, Marc Manly, and Michael Pahutski, and an unidentified recipient, Kay Pashos, Legal and regulatory risks related to power sales by CG&E affiliated CRES provider as part of CG&E' s proposed settlement of 210 Although Johnson’s declaration does not otherwise identify Newton, he is listed among “Attorneys Involved” in ¶ 30, Table, PageID 3638. 211 Described in the privilege log as an “E-mail communications [sic] containing confidential A/C communications and attorney work product regarding PUCO hearing”. Doc. 175-1, PageID 3594. 212 The privilege log describes these documents as an “Outline of CG&E RSP settlement proposal to” Kroger, OEG, OHA and Cognis “containing confidential A/C communications and attorney WP”. Doc. 175-1, PageID 3622. Johnson describes the documents included in Category F as “Work product and counsel mental impressions regarding RSP and/or RSP settlement proposals.” Johnson Decl. ¶ 30, Table, PageID 3638. 213 The privilege log describes these documents as an “Outline of CG&E RSP settlement proposal to” IEU/Ashland Marathon, Kroger, OEG, and OHA “containing confidential A/C communications and attorney work product”. Doc. 175-1, PageID 3624. Johnson describes the documents included in Category F as “Work product and counsel mental impressions regarding RSP and/or RSP settlement proposals.” Johnson Decl. ¶ 30, Table, PageID 3638. 214 The privilege log states that the document contains “[r]edline edits to memorandum addressing legal issues associated with CRES contracts and settlement with industrial customers in RSP case”. Doc. 175-1, PageID 3625. 48 its ERRSP case215 • 376 –Document said to have been authored by in-house lawyer Paul ColbertMay 5, 2004, Summary of RSP settlement.216 There is no indication in the privilege log that the document was ever distributed to anyone. • 377- September 27, 2004 document said to have been authored by Vice President for Regulatory and Legislative Strategy James Gainer, RSP Options217 • 391–September 3, 2004 email from Paul Colbert to Vice President for Rates Jack Steffen and his subordinate Jim Ziolkowski,, OEG Agreement, 5-2-04218 As to Document 35, on or before August 22, 2014 defendants are ORDERED to provide an affidavit from Kodwo Ghartley-Tague stating the nature of his communication and whether the communication sought advice from in-house counsel. The affidavit should set out all the facts supporting the claim of attorney-client privilege. As to Documents 350-54, 364-66, 368 and 376, on or before August 22, 2014, defendants are ORDERED to provide an affidavit from Paul Colbert stating the factual predicates for their assertions of the attorney-client privilege and work product protection. The affidavit should further state the distribution of the documents and indicate whether they were ever given 215 The privilege log states that the email “[c]omments on memorandum addressing legal issues associated with CRES contracts and settlement with industrial customes in RSP case”. Doc. 175-1, PageID 3625. 216 The privilege log states that the document is “[p]rivileged WP”. Doc. 175-1, PageID 3625. 217 The privilege log states that this document is an “[a]ttorney memo regarding RSP litigation and settlement options”. Doc. 175-1, PageID 3625. 218 The privilege log states this is an “E-mail regarding settlement agreement with OEG in RSP case before PUCO”. Attorney-client privilege and work product protection are asserted. Doc. 175-1, PageID 3627. 49 to persons outside the corporation. As to Document 377, on or before August 22, 2014, defendants are ORDERED to provide an affidavit from James Gainer stating the factual predicates for their assertions of the attorney-client privilege. Although Gainer was formerly an in-house lawyer for CG&E, he held a business position when he authored the email. If he asserts that he was acting as an attorney when he sent the email, his affidavit should set out the facts supporting that assertion. Alternatively as to the above documents, defendants may submit them for in camera inspection. Defendants have demonstrated that Documents 372, 373, and 391 are attorneyclient and/or work product protected documents. Category G: [C]ommunications between internal counsel regarding pending proceedings at the PUCO and the Deeds claims/litigation. In many of the items, (for example #18-22), counsel are gathering information from each other. In still others, counsel are discussing issues as they perceive them (#370). In all cases, this category contains attorney work product. 219 Defendants' Claim of Privilege: Communication among only counsel concerning proceedings (claims involving Deeds and proceedings then pending at PUCO) and legal research on issues; this is attorney work product.220 Documents: • 18–November 3, 2006 email from in-house lawyer Paul Colbert to Vice President for State and Federal Regulation, Legal Kodwo Ghartley-Tagoe and Associate General Counsel Ariane Johnson, Option Contracts221 219 Johnson Decl., ¶ 31, PageID 3640. 220 Id., ¶ 30, Table, PageID 3638. 221 Documents 18-22 are described in the privilege log as “E-mail correspondence regarding option agreements and then-pending proceedings before the PUCO”. Doc. 175-1, PageID 3593. 50 • 19–November 3, 2006 email from Johnson to Colbert, 11-3-06, Option Contracts • 20–November 3, 2006 email from Colbert to Johnson, Option Contracts • 21–November 3, 2006 email from in-house lawyer Michael Pahutski to Colbert, FW: MAIN3LEGAL, Side deal cases • 22–November 3, 2006 email from senior paralegal Anita M. Schafer222 to Colbert and Pahutski, FW: MAIN3LEGAL, Side deal cases • 63–November 2, 2006 email from Johnson to Colbert, lEU-Ohio Agreement223 • 64–November 2, 2006 email from Colbert to Ghartley-Tagoe, Johnson, and Pahutski, MAIN3LEGAL, Side deal cases224 • 65–November 2, 2006 email from Johnson to Colbert, RE: MAIN3LEGAL, Side deal cases225 • 370 -March 14, 2007 email from Senior Vice President, Legal Paul Newton226 to Rita R. Kale,227 FW: 5 toughest questions228 As to Documents 18-22 and 63-65, defendants have demonstrated they are either attorney-client communications or are attorney work product. As to Doc. 370, on or before August 22, 2014, defendants are ORDERED to provide the affidavit(s) required earlier for 222 Johnson Decl., ¶ 10, Table, PageID 3634. 223 The privilege log says this is a “[c]onfidential e-mail communication regarding settlement with IEU prepared in connection with then-pending PUCO proceedings”. Doc. 175-1, PageID 3597. 224 The privilege log says this document is “E-mail communications discussing legal research regarding settlements in then-pending PUCO proceedings”. Id. 225 The privilege log says this document is “E-mail communications regarding option agreements and then-pending PUCO proceedings”. Id. 226 Johnson Decl., ¶ 10, Table, PageID 3633. 227 Not identified in the Johnson Declaration. 228 The privilege log says this is an “E-mail chain communication between Paul Newton and Marc Manly dated 3/13/2007 regarding option contracts and thenpending PUCO proceedings”. Doc. 175-1, PageID 3624. 51 Doc. 35 and an affidavit from Kale setting out the facts supporting defendants’ claim this email was an attorney-client communication or, alternatively, submit the document for in camera review. Category H: [C]ommunications between internal counsel and support staff working under their direction and supervision regarding pending proceedings at the PUCO and the Williams matter (#114 deals with responses to requests and gathering of information in connection with the responses).229 Defendants' Claim of Privilege: Communication among only counsel regarding this litigation (Williams case) and then pending PUCO proceedings; this includes preparation of materials for proceedings and/or discussions concerning issues/strategy; this is attorney-work product.230 Documents: • 49–July 8, 2008 email from senior paralegal Anita M. Schafer to inhouse lawyer Paul Colbert, FW: timeline231 • 70–November 28, 2006 email from Vice President for State and Federal Regulation, Legal Ghartley-Tagoe to in-house lawyers Paul Colbert and Ariane Johnson, Dortch232 memo on side deals233 • 71–November 20, 2006 email from Dortch to Senior Vice President, Legal Paul Newton and Ghartley-Tagoe, SA memo (Final Draft).doc • 72–November 22, 2006 email from Dortch to Newton and GhartleyTagoe, SA memo update.doc • 114-September 13, 2007 email from in-house lawyer Rocco D' Ascen- 229 Johnson Decl., ¶ 31, PageID 3640. 230 Id., ¶ 30, Table, PageID 3638. 231 The privilege log says this is an “E-mail forwarding timeline created by counsel in connection with Williams litigation and PUCO proceedings” Doc. 175-1, PageID 3596. 232 Dortch is a lawyer with Kravitz, Brown & Dortch, defendants’ outside counsel. Johnson Decl., ¶ 18, PageID 3636. 233 The privilege log says Documents 70-72 are emails “regarding Ohio Supreme Court rules on side agreements”. Doc. 175-1, PageID 3598. 52 • • • • • zo to Dortch, Attorney WP234 119–February 7, 2007 email from Sarah Welles235 to D' Ascenzo, FW: Ziolkowski236 e-mails237 120-Apparently an undated email from Welles to D' Ascenzo that included a file labeled Ziolkowski.pdf, Ziolkowski e-mails238 144–April 20, 2006 email from D' Ascenzo to Assistant General Counsel Kate Moriarty, RSP Side agreements239 145–April 20, 2006 email from Moriarty to D' Ascenzo, RSP Side agreements240 146–August 18, 2006 email from Peggy J. Jackson241 to D' Ascenzo, 234 Apparently the subject line of the email read: Attorney WP. The privilege log states “Confidential e-mail communication regarding options agreement sent to outside counsel”. Doc. 175-1, PageID 3602. 235 Johnson’s declaration does not identify Sarah Welles. It does not include Welles as an attorney in the table setting out the nature of the privilege claimed for each category of emails and the “Attorneys Involved”. Johnson Decl., ¶ 30, Table, PageID 3638. 236 Jim Zioklowski was an analyst in defendants’ Rate Department. Johnson Decl., ¶ 17, PageID 3636. Gainer Dep., 117, Doc. 179-2, PageID 3749. His May 11, 2006 email outlining "the history behind the so-called 'CRES' payments" was produced in discovery. Doc. 179-1, PageID 3746. Which emails are referenced and/or contained in Documents 119 and 120 is not stated in defendants’ privilege log or in Johnson’s declaration. 237 The privilege log says this is an “E-mail forwarding information in connection with Deeds litigation and then-pending PUCO proceedings”. The privilege asserted is “Privileged WP”. Doc. 175-1, PageID 3603. 238 The privilege log contains no description of the subject matter of the email or its purpose. The claim is made that the email was an attorney-client communication and that it contained attorney work product. Id. 239 The privilege log says this is an “E-mail response to request for copies of certain PUCO orders”. Doc. 175-1, PageID 3605. 240 The privilege log says this is an “E-mail regarding request for copies of certain PUCO orders”. Id. 241 Johnson’s declaration does not identify Jackson. 53 FW: CRES Option Customers242 • 147–August 18, 2006 email from Jackson to D' Ascenzo, No subject is indicated in the privilege log.243 • 148–January 21, 2008 email from D' Ascenzo to Colbert, MAIN4LEGAL, timeline_of_MBSSO procedure_compared_to-DERS contracts. XLS244 As to Documents 49, 70-72, 114, 144-45 and 148, defendants have demonstrated they are either attorney-client communications or are attorney work product. As to Documents 119 and 120, on or before August 22, 2014, defendants are ORDERED to provide the affidavit of Sarah Welles establishing the factual predicates to their claim of attorney-client privilege and work product protection. The affidavit should identify the Ziolkowski document(s) for which work product protection is claimed and explain why it is so protected. As to Documents 146 and 147, on or before August 22, 2014, defendants are ORDERED to provide the affidavit of Peggy J. Jackson establishing the factual predicates to their claim of attorney-client privilege and work product protection. Alternatively, they may submit the documents for in camera review. 242 The privilege log says this is a “[c]onfidential e-mail communication[] regarding option agreements, prepar[ed] in connection with Deeds litigation and then-pending PUCO proceedings”. Doc. 175-1, PageID 3605. 243 The privilege log says this is a “[d]ocument regarding option agreements, attached to confidential A/C and WP email regarding same, prepare[ed] in connection with Deeds litigation and then-pending PUCO proceedings”. Doc. 175-1, PageID 3606. 244 The privilege log says this is an “E-mail forwarding draft timeline prepared by counsel in connection with the Williams litigation and then-pending PUCO proceedings”. Doc. 175-1, PageID 3606. 54 Category I: [I]ntemal counsel exchanging attorney work product for input and information. The work product contains counsels' mental impressions.245 Defendants' Claim of Privilege: From counsel to other counsel providing material that was prepared in connection with Williams case - attorney work product.246 Documents: • 34–March 6, 2007 email from D' Ascenzo to Colbert, MAIN3LEGAL_MBSSO_Timeline_of_events.DOC247 • 367–January 24, 2007 email from Vice President and General Counsel Jeff Gollomp to Associate General Counsel Ariane Johnson and Senior Paralegal Nancy Gay,248 Legal memo249 As to these two documents, defendants have demonstrated they are either attorneyclient communications or are attorney work product. Category J: In this category, the client seeks counsel's input and communicates with them about then-pending PUCO proceedings. Item 261 seeks input and advice from counsel (Pahutski) concerning his view of the likelihood of certain proceedings.250 Defendants' Claim of Privilege: Client seeking advice regarding the Williams case and PUCO proceedings such as audits and other matters.251 245 Johnson Decl., ¶ 31, PageID 3640. 246 Id., ¶ 30, PageID 3639. 247 The privilege log says this is an “E-mail communication forwarding timelines created by counsel for Deeds litigation and then-pending PUCO proceedings”. Doc. 1751, PageID 3594. 248 Johnson Decl., ¶ 10, Table, PageID 3634. 249 The privilege log says the document is an “E-mail forwarding memorandum addressing legal issues associated with CRES contracts and settlement with industrial customers in RSP case”. Doc. 175-1, PageID 3624. 250 Johnson Decl., ¶ 31, PageID 3640. 251 Id., ¶ 30, Table, PageID 3639. 55 Documents: • 44 –September 9, 2004 email from Christa Barnhart252 to Christa Barnhart, Amy Chong,253 and Paul Colbert, Cinergy Retail Sales agreements. Confidential e-mail communication regarding CRS agreements254 • 261–Bob Parsons255 to in-house counsel Michael Pahutski and Barry F. Blackwell,256 RE: CG&E case257 • 265–May 10, 2005 email from Gainer to Parsons, CG&E President Greg Ficke, Vice President for Rates Jack Steffen, Colbert, Don Walthen,258 RE: CG&E Rate Case Expense259 • 270–December 2, 2005 email from Wathen to Colbert, RE: CG&E rate Case260 252 Johnson’s declaration does not identify Barnhart. She is not listed as an attorney in the table setting out the nature of the privilege claimed and the “Attorneys Involved”. Id., ¶ 30, PageID 3639. 253 Johnson’s declaration does not identify Chong. She is not listed as an attorney in the table setting out the nature of the privilege claimed and the “Attorneys Involved”. Id., ¶ 30, PageID 3639. 254 Doc. 175-1, PageID 3595. 255 Johnson’s declaration does not identify Parsons. He is not listed as an attorney in the table setting out the nature of the privilege claimed and the “Attorneys Involved”. Id., ¶ 30, PageID 3639. 256 Johnson’s declaration does not identify Blackwell. He is not listed as an attorney in the table setting out the nature of the privilege claimed and the “Attorneys Involved”. Id., ¶ 30, PageID 3639. 257 The privilege log says this is an “E-mail regarding communication with PUCO staff related to RSP case”. Doc. 175-1, PageID 3614. 258 Johnson’s declaration does not identify Walthen. He is not listed as an attorney in the table setting out the nature of the privilege claimed and the “Attorneys Involved”. Id., ¶ 30, PageID 3639. 259 The privilege log says this document is an “E-mail regarding communications with PUCO staff related to RSP case”. Doc. 175-1, PageID 3615. 260 The privilege log says this document is an “E-mail containing confidential A/C communications regarding amended stipulation in RSP case before PUCO”. Id. 56 As to Doc. 44, on or before August 22, 2014, defendants are ORDERED to provide affidavits from Christa Barnhart and Amy Chong setting out the facts supporting their assertion of attorney-client privilege and work product protection. As to Docs. 261, 265 and 270, on or before August 22, 2014, defendants are ORDERED to provide affidavits from Bob Parson, Barry F. Blackwell, and Don Walthen setting out the facts supporting their assertion of attorney-client privilege and work product protection. Alternatively, they may submit the documents for in camera review. Category K: This series of communications arose initially from the Deeds' claim letter and subsequent lawsuit and resulted in communications between and among internal counsel either with Duke employees seeking information, or among themselves, seeking to gather information. This is attorney work product.261 Defendants' Claim of Privilege: Emails by which information is gathered for purposes of litigation (both Deeds and Williams) and prepared at the request of counsel. Documents: • 166–June 5, 2006 email from in-house lawyer Michael Pahutski to Renee Marko,262 Constellation New Energy, Kroger Extension. Privilege log description: “E-mail forwarding draft correspondence to Kroger requesting legal review and advice”.263 • 213–January 4, 2005 email from CG&E President Greg Ficke to D.J. Rottinghaus,264 Colbert, Steffen, Gainer, Michael Cyrus,265 and Todd 261 Johnson Decl., ¶ 31, PageID 3640. 262 Not identified in the Johnson Declaration. 263 Doc. 175-1, PageID 3607. 264 Not identified in the Johnson Declaration. 265 Not identified in the Johnson Declaration. 57 • • • • • Arnold,266 RE: RSP filing. Privilege log description: “Confidential e-mail communications regarding RSP filings with PUCO”.267 222– March 8, 2007 email from assistant to in-house lawyer Paul Colbert Anita M. Schafer to Steve DePenning, RE: MAIN3LEGAL_timeline_of_MBSSO_procedure_compared_to_DERS _contracts.pdf. Privilege log description: “E-mail regarding draft timeline prepared in connection with the Deeds litigation and thenpending PUCO proceedings”.268 224–March 9, 2007 email from Steve DePenning to Schafer, MAIN3LEGAL_timeline_of_MBSSO_procedure_compared_to_DERS_contr acts.pdf. Privilege log description: “Draft timeline prepared by counsel in connection with Deeds litigation and then pending PUCO proceedings”.269 225–March 9, 2007 email from in-house counsel Rocco D' Ascenzo to DePenning, No subject. The file name is RE: MAIN3LEGAL_timeline_of_MBSSO_procedure_compared_to_DER contracts.pdf. Privilege log description: “Draft timeline prepared in connection with Deeds litigation and then pending PUCO proceedings”.270 230–January 8, 2007 email from Senior Paralegal Nancy Gay271 to inhouse attorney Michael Pahutski, 2005 CRS Payments Summary.xis. Privilege log description: “E-mail forwarding option payment information requested by counsel in connection with claim by John Deeds”.272 231–January 8, 2007 email from Gay to Pahutski. No subject. File name: CRS Payments Summary. xis. Privilege log description: “Spreadsheet”.273 266 Not identified in the Johnson Declaration. 267 Doc. 175-1, PageID 3611. 268 Id. 269 Id. 270 Doc. 175-1, PageID 3612. 271 Johnson Decl., ¶ 10, Table, PageID 3634. 272 Doc. 175-1, PageID 3612. 273 The privilege log says that a spreadsheet file was attached to the email. Id. 58 • 242–October 21, 2004 email from Vice President for Rates Jack Steffen to CSG&E President Greg Ficke, Gainer, Steve Schrader,274 FW: settlement vs stipulation.xis. Privilege log description: “E-mail forwarding document analyzing settlement options in RSP case”.275 (None of the senders/recipients were in defendants’ legal department.) • 387 -November 13, 20-06 email from Jim Ziolkowski to Schafer, Re: Agreements. Privilege log description: “E-mail chain concerning confidential A/C communications from Colbert related to option agreements”.276 • 390–October 8, 2008 email from Jim Ziolkowski to Barry W. Wood,277 RE: DERS Option Payments To Hospitals 2007 and 2008. Privilege log description: “E-mail containing confidential A/C communication regarding option payments and gathered in connection with Williams litigation”.278 As to document 166, on or before August 22, 2014, defendants are ORDERED to provide an affidavit from Renee Marko stating the factual predicates for their assertions of the attorney-client privilege and work product protection. As to Document 213, on or before August 22, 2014, defendants are ORDERED to provide a affidavits from Greg Ficke, D.J. Rottinghaus, Michael Cyrus, and Todd Arnold stating the factual predicates for their assertions of the attorney-client privilege and work product protection. As to Documents 350-54, 364-66, 368 and 376, on or before August 22, 2014, defendants are ORDERED to provide an affidavit from Paul Colbert stating the factual predicates for their assertions of the attorney-client privilege and work product protection. As to Documents 222 and 224, 274 Not identified in the Johnson Declaration. 275 Doc. 175-1, PageID 3613. 276 Id., PageID 3626. 277 Not identified in the Johnson Declaration. 278 Doc. 175-1, PageID 3627. 59 on or before August 22, 2014, defendants are ORDERED to provide an affidavit from Steve DePenning stating the factual predicates for their assertions of the attorney-client privilege and work product protection. As to document 242, on or before August 22, 2014, defendants are ORDERED to provide n affidavits from Jack Steffen, Greg Ficke, Jim Gainer, and Steve Schrader stating the factual predicates for their assertions of the attorneyclient privilege and work product protection. As to Documents 222 and 224, on or before August 22, 2014, defendants are ORDERED to provide an affidavit from Steve DePenning stating the factual predicates for their assertions of the attorney-client privilege and work product protection. As to Documents 387 and 390, on or before August 22, 2014, defendants are ORDERED to provide affidavits from Jim Ziolkowski and Barry W. Wood stating the factual predicates for their assertions of the attorney-client privilege and/or work product protection. Alternatively as to the above documents, defendants may submit them for in camera inspection. Defendants have demonstrated that Documents 230 and 231 are attorney-client and/or work product protected documents. Category L: [D]ocuments created by counsel, including notes and mental impressions, in connection with the defense of the Williams and Deeds matters.279 Defendants' Claim of Privilege: Attorney notes and mental impressions for Williams/Deeds and PUCO matter.280 Documents: • 347–August 28, 2007 email from Associate General Counsel George 279 Johnson Decl., ¶ 31, PageID 3640. 280 Id., ¶ 30, Table, PageID 3639. 60 Dwight281 to outside counsel Michael Dortch, DERS President Chuck Whitlock,282 in-house counsel Michael Pahutski, and Fred Wiesen283, RE: Revised draft response to Chesley284 • 348 –Paul Colbert author of otherwise unidentified 2007 document. No indication of who, if anyone, received the document. The privilege log describes the document as “Attorney notes regarding option contracts, prepared in connection with John Deeds v. Duke Energy (“Deeds”) litigation and PUCO proceedings”.285 • 349–November 14, 2006 document created by Ariane Johnson, The privilege log describes the document as “Witness interview notes prepared by counsel in connection with Deeds claim and then-pending PUCO proceedings”.286 Defendants have demonstrated that Documents 230 and 231 are attorney work product. Category M: This document is legal advice from internal counsel concerning RSP notice requirements under regulatory law.287 Defendants' Claim of Privilege: Attorney advice to client on RSP notice requirements.288 Documents: 281 Id., ¶ 10, Table, PageID 3635 282 Id., ¶¶ 21 and 24, PageID 3636-37 283 Not identified in the Johnson Declaration and not included in ¶ 30, Table “Attorneys Involved” column. Id., PageID 3638. 284 The privilege log says this is an “E-mail containing confidential A/C communications regarding public records request submitted by Stanley Chesley to the PUCO”. Doc. 175-1, PageID 3622. 285 Id. 286 Id. 287 Johnson Decl., ¶ 31, PageID 3640. 288 Id., ¶ 30, Table, PageID 3639. 61 • 184–November 28, 2004 email from in-house lawyer Paul Colbert to Marcia J. Myers,289 CSG&E President Greg Ficke, Vice President for Regulatory and Legislative Strategy Jim Gainer, Vice President for Rates Jack Steffen and Don Jones,290 RE: Legal Notice to All NonResidential Customers of the Cincinnati Gas &Electric Company291 Defendants have demonstrated that Document 184 is an attorney-client communication. For the reasons set out above, plaintiff’s January 10, 2014 motion to compel Duke to produce documents for which it claims attorney-client privilege or work product protection or, in the alternative, for in camera, review of those documents (doc. 175) is GRANTED, in part, and DENIED, in part. Defendants’ February 18, 2014 motion to strike affidavits attached to plaintiffs’ reply brief (doc. 180) is DENIED. I considered the affidavits when deciding whether plaintiffs had made a sufficient showing that the crime-fraud exception to the attorney-client privilege required an in camera review of the withheld documents. Non-dispositive notice right appeal Under the provisions of 28 U.S.C. §636(b)(1)(A), Rule 72(a), Fed. R. Civ. P., and Eastern Division Order No. 91-3, pt. F, 5, either party may, within fourteen (14) days after this Order is filed, file and serve on the opposing party a motion for reconsideration by the District Judge. The motion must specifically designate the Order, or part thereof, in 289 Not identified in the Johnson Declaration. 290 Not identified in the Johnson Declaration. 291 Doc. 175-1, PageID 3608. 62 question and the basis for any objection thereto. The District Judge, upon consideration of the motion, shall set aside any part of this Order found to be clearly erroneous or contrary to law. s/Mark R. Abel United States Magistrate Judge 63

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.