Opinion
96 Civ. 7233 (LMM) (RLE)
May 30, 2003
OPINION ORDER
I. INTRODUCTION
Before this Court is an application by defendant Fiddler, Gonzalez Rodriguez ("Fiddler") seeking a ruling on plaintiff Bank Brussels Lambert's ("BBL") claim of privilege with respect to BBL's due diligence regarding the AroChem Corporation ("AroChem") revolving credit agreement ("RCA"). BBL claims that the answers to questions posed during a prior deposition are protected both by attorney-client privilege and work product. For the following reasons, the Court finds that BBL has waived the attorney-client privilege by placing its state of mind "at issue," and that the work product doctrine is inapplicable. BBL's privilege objections are therefore OVERRULED.
II. BACKGROUND
The facts of this action have been set forth in Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez , 171 F.3d 779, 781-84 (2d Cir. 1999). For the purposes of the current motion, it is important to note that on April 1, 1998, the Court met with both parties and discussed the deposition of Jonathan DuBois ("DuBois"), a partner at Coudert Brothers responsible for performing due diligence for BBL with respect to the AroChem RCA. Fiddler had made a similar application as the one currently before this Court, and according to BBL, this Court denied the application. See Plaintiff's Brief in Opposition ("Pl. Opp.") at 1. Fiddler has not challenged this position, but has merely pointed out that since that decision, both the district court and the Second Circuit have focused their opinions of the case on the causation aspect of BBL's claims. See Defendant's Brief ("Def. Br.") at 2. This focus has resulted in large part from BBL's assertion that it relied on Fiddler's advice in approving the RCA. See Complaint at ¶ 36, 37. To the extent that the Court may have addressed this issue at a prior conference five years ago, reexamination is appropriate.III. DISCUSSION
A. Attorney-Client Privilege and "At Issue" Waiver
Fiddler asserts that BBL has placed its communications with Coudert Brothers "at issue" by claiming damages caused by reliance on Fiddler's advice. In particular, Fiddler seeks to probe whether or not any claimed reliance would have been total or justified when viewed in light of contemporaneous advice Coudert Brothers gave BBL. The "at issue" waiver doctrine was first articulated in Hearn v. Rhay , 68 F.R.D. 574 (E.D. Wash. 1975). See United States v. Bilzerian , 926 F.2d 1285, 1292 (2d Cir. 1991); Pereira v. United Jersey Bank , 1997 WL 773716 *3 (S.D.N.Y. 1997). The court in Hearn articulated a three prong test which must be met to find that a document has been placed "at issue": "(1) assertion of the privilege was a result of some affirmative act, such as filing suit, by the asserting party; (2) through this affirmative act, the asserting party put the protected information at issue by making it relevant to the case; and (3) application of the privilege would have denied the opposing party to information vital to his defense." 68 F.R.D. at 581.
"As a number of courts have recognized, Hearn is problematic insofar as there are very few instances in which the Hearn factors, taken at face value, do not apply, and, therefore, a large majority of claims of privilege would be subject to waiver." Pereira , 1997 WL 773716 at *3 Further, "[e]xpansive interpretation of `at issue' waiver under Hearn and its progeny has recently been the subject of significant legal and academic criticism." Allen v. West Point-Pepperell Inc. , 848 F. Supp. 423, 429 (S.D.N.Y. 1994). However, "[s]ome courts have concluded that [the `at issue' doctrine] should be limited to instances in which the elements of the plaintiff's case clearly implicate privileged information, as opposed to circumstances where . . . a defense putatively requires breaching the privilege." Id. (emphasis in original).
The Court need not resolve these conflicts because in the case at bar BBL has clearly asserted that its reliance on Fiddler was the proximate cause of its injuries. See, e.g. , Complaint at ¶ 36. 37; Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez , 2001 WL 893362 *3 (S.D.N.Y. 2001), rev'd on other grounds , 305 F.3d 120 (2002). Because BBL is claiming that it was relying on Fiddler's advice (or its failure to withdraw as counsel), "the legal advice [it] received from any other lawyers on that subject relates to the reasonableness of [its] reliance and is not subject to the attorney/client privilege." In re Gaming Lottery Securities Litigation , 2000 WL 340897 *2 (S.D.N.Y. 2000). As courts within this district have noted, "[a]ny relevant advice the [plaintiffs] received from their own lawyers or other persons, including any advice with respect to the advisability of going ahead with the proposed [RCA] . . . bears on the issue of the reasonable reliance" Id see also , Granite Partners, L.P. v. Bear Stearns Company, Inc. , 184 F.R.D. 49, 55 (S.D.N.Y. 1999). BBL can not use the interaction between counsel and client as both a sword and a shield. See Bilzerian , 926 F.2d at 1292. To do so is disingenuous and an abuse of the privilege. Therefore, BBL's objections during the DuBois deposition due to attorney-client privilege is OVERRULED.
B. Work Product Doctrine
It is clearly established law that "the work product privilege attaches only if the motivation for creating the document was the litigation." Oxyn Telecommunications, Inc. v. Onse Telecom , 2003 WL 660848 *4 n. 4 (S.D.N.Y. 2003) (citations omitted). Coudert Brothers performed a due diligence review for BBL into the allegations that AroChem was involved in fraudulent activity. See Def. Br. at 1. As defined by Blacks Law Dictionary, due diligence is "[t]he diligence reasonably expected from, and ordinarily exercised by, a person who seeks to satisfy a legal requirement or to discharge an obligation." Black's Law Dictionary, 468 (7th ed. 1999). Therefore, BBL cannot argue that Coudert Brothers performed its work "with an eye toward litigation." Hickman v. Taylor , 329 U.S. 495, 511 (1947). Therefore, Coudert Brothers due diligence work performed for BBL is not protected by the work product doctrine. BBL's work product objections are also OVERRULED.