Opinion
CIVIL ACTION NO. 03-CV-679
December 16, 2003
MEMORANDUM
In this case based on diversity jurisdiction, Plaintiff SecureInfo Corporation alleges that Defendant Edward Bukstel has misappropriated confidential information and tortiously interfered with contractual relations. After an evidentiary hearing, the Court issued a preliminary injunction in favor of Plaintiff, but limited to enjoining Defendant from disclosing Plaintiff's confidential information. The injunction made no restrictions whatsoever on Defendant's economic rights to engage in any business, and specifically stated that it could not be interpreted to infringe on Defendant's First Amendment rights. The Court did find sufficient grounds that Defendant had either disclosed, and/or threatened to disclose, Plaintiff's confidential information to third parties and that Plaintiff had demonstrated injury and threat of further injury from Defendant's conduct. After a series of pleading mishaps, Defendant, acting pro se, filed a Counterclaim seeking damages for breach of contract and intentional infliction of emotional distress.
Now before the Court are several Motions which will be discussedseriatim: 1. Defendant's Motion for a Hearing to Vacate Preliminary Injunction (Docket #79)
The Defendant asserts that Plaintiff has recently secured $10,000,000 in a private placement, that Plaintiff is guilty of unclean hands forinter alia withholding wages, and that Defendant will suffer harm from the continuance of the preliminary injunction. The Plaintiff resists this Motion, arguing that the fact that it was able to secure financing only proves that the injunction is working to prevent Defendant's misuse of Plaintiff's confidential information, denies unclean hands, and denies violation of the Pennsylvania Wage Law. Plaintiff also asserts that Defendant is improperly trying to litigate arguments previously made unsuccessfully.
The Court will deny Defendant's Motion. The injunction entered by the Court was a limited one, and the Court granted significantly less relief than Plaintiff requested. However, there was uncontradicted evidence that Defendant had improperly used and/or disclosed Plaintiffs valuable confidential information, and the injunction is strictly limited to precluding further wrongful disclosure. Furthermore, Defendant did not appeal from the issuance of the injunction, and the Court finds that Defendant has not shown that he is suffering any significant harm from the terms of the injunction, and has not shown sufficient evidence of a change in circumstances to warrant an evidentiary hearing.
2. Defendant's Motion for Summary Judgment for Violation of the Pennsylvania Wage and Collection Law (Docket # 88)
Defendant moves for summary judgment that Plaintiff has violated the Pennsylvania Wage Payment and Collection Law, 43 PA. CONS. STAT. § 260.3 (2003).
As Plaintiff points out, Defendant's Counterclaim does not have a claim under the Pennsylvania Wage Payment and Collection Law. Therefore, this Court does not have any power to grant summary judgment to Defendant on a claim that has not been made in its Counterclaim. Furthermore, Plaintiff denies withholding wages from the Defendant, and points out that Defendant does have a breach of contract claim in which the wage payment claim may be subsumed. In any event, there is a genuine issue of fact for trial as to whether the Plaintiff still owes the Defendant any wages.
For all these reasons, the Court will deny Defendant's Motion for Summary Judgment on the Pennsylvania Wage and Collection Law.
3. Defendant's Motion to Dismiss Complaint for Reading Attorney-Client Privileged Documents and Forwarding Privileged Information to Third Parties (Docket # 94)
This Motion was filed under seal, but the Court concludes that there is no privileged or confidential information contained in the pleadings related to this Motion and directs that the Motion be unsealed.
On the merits of the Motion, Defendant asserts that Plaintiffs counsel secured and has read confidential communications between Defendant and an attorney. Defendant states that he is receiving legal advice from a Mr. Eric Stern, who is an employee of PricewaterhouseCoopers. However, Defendant has never submitted any privilege log or description of attorney-client privileged communications, as required by Rule 26(b)(5) of the Federal Rules of Civil Procedure. Plaintiff assets that because Defendant is proceeding pro se in this litigation, he does not have an attorney-client relationship with Mr. Stern which would allow claims of privilege in this case. It is also unclear from the record as to exactly what is Mr. Stern's role in this case, although he is clearly not counsel of record.
The Court need not decide whether Defendant may have a privileged communications with an attorney who has not entered an appearance in the litigation, but will assume that Defendant has a right to keep such communications confidential from discovery. However, without a privilege log or some other showing of exactly what communications Plaintiffs counsel may have read, the Court is unable to consider on the merits, let alone grant, Defendant's Motion. As noted below, Plaintiff has one letter from Mr. Stern with some general advice about pleadings and strategy. This document does not alone constitute a privileged communication. Even if Plaintiffs counsel did read some communications between Defendant and Mr. Stern that were privileged, that would not require dismissal of the Complaint. Defendant does not show how he was prejudiced, and the Court cannot make any conclusions because there is nothing in the pleadings relating to this Motion to demonstrate that any information relevant on the merits of this case came to the attention of Plaintiff's counsel. Therefore, Defendant's Motion will be denied.
4. Defendant's Motion to Disqualify Morgan Lewis for Violation of Professional Rules of Conduct in Contempt for Court's Directions for the Handling of Privileged Documents (Docket # 98)
This document was also improperly filed under seal and does not contain any confidential information. Therefore, it should be unsealed.
The background of facts relating to this Motion is the same as in the Motion described in paragraph no. 3, Docket # 94. In his moving papers, Defendant asserts that Morgan Lewis is a client of PricewaterhouseCoopers, and that Morgan Lewis contacted PricewaterhouseCoopers about the allegedly privileged documents. Once again, without deciding the substantive issues relating to attorney-client privilege, because Defendant has not submitted a privilege log, and has not attached to his Motion any allegedly privileged documents which came to the attention of Plaintiff's counsel and were in some manner improperly handled by Plaintiffs counsel, the Court finds that Defendant's Motion is unsupported and will deny the Motion. 5. Defendant's Motion for Temporary Restraining Order and Preliminary Injunction for Misappropriation and Disclosure of Attorney-Client Privileged Communications To Third Parties and the Court (Docket # 101)
This document also shows that it was filed under seal, but it should be unsealed immediately for the reasons stated above.
The background of this Motion is the same as for the Motions described above under Dockets # 94 and # 98. Once again, the only attachments to the pleadings are some e-mails between Defendant and Mr. Stern. Mr. Stern gives Defendant some general advice on pleadings and strategy. However, there is no discussion of any facts relevant to this case. As noted above, Defendant has not served a privilege log nor has Defendant shown that the Plaintiff is in possession of any substantive facts relevant to the case, or communications where Plaintiff is seeking or receiving legal advice related to the facts of this case.
Defendant has not shown any grounds for a temporary restraining order or a preliminary injunction, and his Motion will be denied.
6. Defendant's Motion to File Certain Motions and Exhibits under Seal (Docket # 103)
This Motion will be denied because none of the Motions which Defendant desires to file under seal contain any confidential information that must be protected from public view.
7. Defendant's Second Motion to Compel Expedited Discovery and Contempt Against SecureInfo for Violating a Court Order to Produce Documents and Suppression of Evidence (Docket # 96)
In this Motion, Defendant complains that Plaintiff has failed to produce documents that the Court directed to be produced and/or are relevant to the disputes in this case, and gives certain specific examples of additional documents which allegedly should have been produced. However, Defendant fails to attach a certificate or otherwise certify that he made a good faith attempt to resolve these disputes by a conference with Plaintiffs counsel, which is an absolute prerequisite to filing a Motion to Compel pursuant to Local Civil Rule 26.1(f). Therefore, Defendant's Motion will be denied without prejudice.
The Court will require that Defendant meet with Plaintiff's counsel, face to face, within fourteen (14) days of this Order, at the offices of Plaintiff's counsel, to attempt to resolve the dispute over document production. After that meeting is held, and in the absence of an agreement between the parties relating to this dispute, the Court will allow Defendant to take a deposition of one appropriate representative of Plaintiff knowledgeable about the production of documents in this case, as a prerequisite to filing a further Motion to Compel. Such deposition shall be taken within thirty (30) days from the date of this Order. The discovery period shall be extended for this specific matter only. Any Motion to Compel shall be filed within ten (10) days of the completion of any such deposition, and Defendant shall attach to the Motion any relevant portions of the deposition transcript supporting his Motion.
8. Plaintiff's Motion for an Expedited Hearing and for Sanctions (Docket # 102)
In this Motion, Plaintiff asserts that Defendant has needlessly caused Plaintiff undue burden and expense by repeatedly filing Motions concerning attorney-client privilege as to his communications with Mr. Stern. As noted above, the Court has found that by not filing a privilege log, as required by Rule 26(b)(5), Defendant has failed to take the first step to assert an attorney-client relationship with Mr. Stern, and has failed to identify any privileged communications which may be at issue. As noted above, Defendant filed three Motions, all of them repetitive, on this issue, without having first satisfied the basic requirements for asserting privileged communications in federal civil litigation.
Defendant's conduct has undoubtedly caused additional expense to SecureInfo, and has also required the Court to needlessly review several basically repetitive Motions that are without foundation and support.
For the reasons stated above in this Memorandum, the Court has denied all of Defendant's Motions concerning attorney-client privilege. The Court directs that Defendant serve a privilege log within fourteen (14) days and submit any documents as to which he asserts the privilege to the Court in camera.
The Court intends to adjudicate this case on the merits and not on the peripheral issues of discovery, privilege and sanctions. Therefore, the Court declines to dismiss the Plaintiff's Complaint, as requested by the Defendant, and to dismiss the Defendant's Counterclaim, as requested by the Plaintiff.
However, the Defendant shall be sanctioned for the filing of repetitive and unsupported Motions relating to the attorney-client privilege without having first complied with Rule 26(b)(5). The only sanction at this time will be that Defendant is barred from filing any additional Motions relating to assertions of attorney-client privilege until further Court order. Costs may be imposed if Defendant disregards this order.
On December 12, 2003, Plaintiffs moved for an extension of the discovery deadline (Docket #112), asserting that Defendant's status as represented or unrepresented was not clear and this was delaying Plaintiff taking Defendant's deposition. Because no attorney has entered an appearance for Defendant, the Court concludes that he is proceedingpro se, and all fact discovery is extended to January 5, 2004.
An appropriate Order follows.
ORDER
AND NOW, this 16th day of December, 2003, upon consideration of the record and the foregoing memorandum, it is hereby ORDERED as follows:
1. The following pleadings shall be UNSEALED:
a. Defendant's Motion to Dismiss Complaint for Reading Attorney-Client Privileged Documents and Forwarding Privileged Information to Third Parties (Docket No. 94);
b. Defendant's Motion to Disqualify Morgan Lewis for Violation of Professional Rules of Conduct in Contempt for Court's Directions for the Handling of Privileged Documents (Docket No. 98); and
c. Defendant's Motion for Temporary Restraining Order and Preliminary Injunction for Misappropriation and Disclosure of Attorney-Client Privileged Communications To Third Parties and the Court (Docket No. 101);
2. Defendant's following Motions are DENIED:
a. Defendant's Motion for a Hearing to Vacate Preliminary Injunction (Docket No. 79);
b. Defendant's Motion for Summary Judgment for Violation of the Pennsylvania Wage and Collection Law (Docket No. 88);
c. Defendant's Motion to Dismiss Complaint for Reading Attorney-Client Privileged Documents and Forwarding Privileged Information to Third Parties (Docket No. 94);
d. Defendant's Motion to Disqualify Morgan Lewis for Violation of Professional Rules of Conduct in Contempt for Court's Directions for the Handling of Privileged Documents (Docket No. 98);
e. Defendant's Motion for Temporary Restraining Order and Preliminary Injunction for Misappropriation and Disclosure of Attorney-Client Privileged Communications To Third Parties and the Court (Docket No. 101); and
f. Defendant's Motion to File Certain Motions and Exhibits under Seal (Docket No. 103);
3. Defendant's Second Motion to Compel Expedited Discovery and Contempt Against SecureInfo for Violating a Court Order to Produce Documents and Suppression of Evidence (Docket No. 96) is DENIED WITHOUT PREJUDICE. However, Plaintiff's Counsel and Defendant shall meet as stated in this Memorandum;
4. Plaintiff's Motion for an Expedited Hearing and for Sanctions (Docket No. 102) is GRANTED IN PART, and Defendant shall not file any further motion related to attorney-client privilege until further order of this Court;
5. Defendant's Motion to Strike Plaintiffs' SecureInfo's Motion to Strike Defendants' Four Motions filed on August 29th 2003 for Failure to Serve Motion on Defendant and Reverse the Court Order to Strike Defendant's Four Motions (Docket No. 85) is DENIED AS MOOT, inasmuch as the Court has already granted Plaintiffs Motion to Strike Defendant's Four Motions (Docket No. 77), in an Order dated September 24, 2003;
6. Plaintiff's Motion to extend fact discovery is GRANTED, and fact discovery is extended to January 5, 2004; and
7. There shall be a status conference on January 29, 2004 at 4:15 p.m. regarding discovery and any other pre-trial matters. Please call Chambers at 267.299.7520 for the courtroom location.