Miller v. Dutil et al

Since this motion to compel was filed, Canam Group, Inc. has been substituted1
for Canam Steel Corp. as counterclaimant and third-party plaintiff. I assume that Canam Group
supports this motion to compel and will consider it accordingly.
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re 	: 	Chapter 11
TOTAL CONTAINMENT, INC. 	:
Debtor 	: 	Bankruptcy No. 04-13144bif
____________________________________
GEORGE L. MILLER, Chapter 11 trustee 	:
Plaintiff 	:
v. 	:
MARCEL DUTIL, et al. 	:
Defendants 	: 	Adversary No. 05-0145
____________________________________
..............................................................
MEMORANDUM
..............................................................
Canam Steel Corporation and Finloc, Inc. have filed a joint motion to
compel the plaintiff in this adversary proceeding, George L. Miller, to produce certain
documents and supplement his answers to interrogatories. 	Mr. Miller initially opposed1
any such relief, but in a supplemental memorandum he agreed to modify his answers to
interrogatories from these defendants. Nonetheless, there remains a dispute among these
parties, primarily involving the plaintiff’s assertion of privilege concerning numerous
documents.
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I have reviewed the parties’ extensive written submissions, including in
camera review of numerous documents designated by the plaintiff as protected by the
attorney-client privilege, the joint-defense privilege, and/or the work-product doctrine. I
have also reviewed the plaintiff’s privilege log, which the movants complain is deficient
because it did not specify the reason the unproduced documents were privileged.
The movants also assert that the plaintiff waived any attorney-client
privilege when he responded to interrogatories concerning the reasons that the plaintiff
“did not attempt to reopen and/or vacate the judgment” in the “Murphy Oil Suit” and the
“Pisces Suit,” with answers that included the following:
. . . based upon the advice of counsel, the Trustee concluded
that the likelihood of prevailing . . . was likely non-existent
(or at best extremely small) and not worth the expenditure of
limited Estate resources. . . .
Based upon this response, the movants contend that the plaintiff must now produce “all
documents that constitute, refer to, or otherwise concern any of the referenced legal
advice upon which Mr. Miller allegedly relied.” Movants’ Memorandum, at 4; see
generally Berckeley Inv. Group, Ltd. v. Colkitt, 455 F.3d 195, 221 n.24 (3d Cir. 2006)
(“[W]e remind the parties that the attorney-client privilege cannot be used as both a
‘shield’ and a ‘sword’: Berckeley cannot rely upon the legal advice it received for the
purpose of negating its scienter without permitting Colkitt the opportunity to probe the
surrounding circumstances and substance of that advice.”).
The plaintiff responds that his privilege log adequately informed the
movants as to the nature of the privilege and, if not, his amended privilege log corrected
any deficiencies. He further contends that his answer to the interrogatories, quoted above,
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did not waive any attorney-client privilege, relying upon the following analysis from the
Third Circuit Court of Appeals:
There is authority for the proposition that a party can waive
the attorney client privilege by asserting claims or defenses
that put his or her attorney’s advice in issue in the litigation.
For example, a client may waive the privilege as to certain
communications with a lawyer by filing a malpractice action
against the lawyer. . . . A defendant may also waive the
privilege by asserting reliance on the advice of counsel as an
affirmative defense. Chevron Corp. v. Pennzoil Co., 974 F.2d
1156 (9th Cir. 1992) (party’s claim that its tax position was
reasonable because it was based on advice of counsel puts
advice in issue and waives privilege); see also Hunt v.
Blackburn, 128 U.S. at 470, 9 S. Ct. at 127 (client waives
privilege when she alleges as a defense that she was misled by
counsel). . . . In an action for patent infringement, where a
party is accused of acting willfully, and where that party
asserts as an essential element of its defense that it relied upon
the advice of counsel, the party waives the privilege regarding
communications pertaining to that advice. Mellon v.
Beecham Group PLC, 17 U.S.P.Q.2d 1149, 1151, 1991 WL
16494 (D.N.J. 1991); see also, e.g., W.L. Gore & Associates,
Inc. v. Tetratec Corp., 15 U.S.P.Q.2d 1048, 1051, 1989 WL
144178 (E.D. Pa. 1989) (client waived privilege by asserting
reliance upon advice of counsel as an essential element of his
defense).
In these cases, the client has made the decision and taken the
affirmative step in the litigation to place the advice of the
attorney in issue. Courts have found that by placing the
advice in issue, the client has opened to examination facts
relating to that advice. Advice is not in issue merely because
it is relevant, and does not necessarily become in issue merely
because the attorney’s advice might affect the client’s state of
mind in a relevant manner. The advice of counsel is placed in
issue where the client asserts a claim or defense, and attempts
to prove that claim or defense by disclosing or describing an
attorney client communication. . . .
Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851, 863 (3d Cir. 1994)
(citations omitted).
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Canam Group has since been substituted for plaintiff Canam Steel in the2
litigation against TCIE.
4
The plaintiff argues that his reference, in response to interrogatories, to the
advice of counsel only as one of a number of reasons that he took no action to set aside
the prepetition judgments entered against the debtor by Murphy Oil and Pisces, did not
place the advice of counsel at issue in this adversary proceeding. Moreover, the plaintiff
further acknowledges that “he will not assert an ‘advice of counsel’ defense to Canam
Steel and Finloc’s counterclaims.” Plaintiff’s Supplemental Memorandum, at 3. Indeed,
the plaintiff also “acknowledges that without leave of court for good cause shown, he will
not be able to present or offer evidence in support of advice of counsel defense, insofar as
the lack of waiver has prevented Canam Steel and Finloc from pursuing discovery on the
issue.” Id. at 3-4.
Joining Mr. Miller in opposing production of numerous documents is
Delaware Valley Enterprises N.V., f/k/a TCI Environment NV/SA (hereinafter “TCIE”).
TCIE has been sued by Canam Steel, which lawsuit, having commenced in 2005, has2
been removed under 28 U.S.C. § 1452 and is now a proceeding in this bankruptcy case.
This removed lawsuit asserts that Canam Steel guaranteed a debt owed by TCIE and that
Canam Steel repaid that debt rendering TCIE liable to repay the assignee-guarantor,
Canam Group. The plaintiff, George Miller, is the subject of counterclaims and third-
party claims in the above-captioned adversary proceeding involving, inter alia, his control
of TCIE stock and his actions relating to management and operations of TCIE.
TCIE, through its own counsel, now asserts that the documents identified as
privileged by the plaintiff concern information provided to, or advice given by, attorneys
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for TCIE and attorneys for the plaintiff in connection with claims involving TCIE and are
thus protected by the joint-defense privilege and/or the control group attorney-client
privilege.
I shall decide the issues of privilege and waiver against the following
backdrop.
The Supreme Court has described the federal common law attorney-client
privilege in the following manner:
The attorney-client privilege is the oldest of the privileges for
confidential communications known to the common law. 8 J.
Wigmore, Evidence § 2290 (McNaughton rev. 1961). Its
purpose is to encourage full and frank communication
between attorneys and their clients and thereby promote
broader public interests in the observance of law and
administration of justice. The privilege recognizes that sound
legal advice or advocacy serves public ends and that such
advice or advocacy depends upon the lawyer’s being fully
informed by the client. As we stated last Term in Trammel v.
United States, 445 U.S. 40, 51 . . . (1980): “The lawyer-client
privilege rests on the need for the advocate and counselor to
know all that relates to the client’s reasons for seeking
representation if the professional mission is to be carried out.”
And in Fisher v. United States, 425 U.S. 391, 403 . . . (1976),
we recognized the purpose of the privilege to be “to
encourage clients to make full disclosure to their attorneys.”
This rationale for the privilege has long been recognized by
the Court, see Hunt v. Blackburn, 128 U.S. 464, 470 . . .
(1888) (privilege “is founded upon the necessity, in the
interest and administration of justice, of the aid of persons
having knowledge of the law and skilled in its practice, which
assistance can only be safely and readily availed of when free
from the consequences or the apprehension of disclosure”).
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The parties have assumed that federal common law privileges govern this3
dispute. I will make the same assumption. See In re Columbia Gas Systems Inc., 997 F.2d 1039,
1062 n.13 (3d Cir. 1993) (“All parties assume that if federal common law governs the status of
the customer refunds, the same body of law will determine whether the GRI charges and
upstream payments are held in trust. We assume without deciding that this is true.”).
6
Upjohn Co. v. United States, 449 U.S. 383, 389 (1981) (citations omitted). 3
The Third Circuit Court of Appeals reiterated the scope of the federal
common law privilege involving attorney-client communications:
The traditional elements of the attorney client privilege that
identify communications that may be protected from
disclosure in discovery are: (1) the asserted holder of the
privilege is or sought to become a client; (2) the person to
whom the communication was made (a) is a member of the
bar of a court, or his or her subordinate, and (b) in connection
with this communication is acting as a lawyer; (3) the
communication relates to a fact of which the attorney was
informed (a) by his client (b) without the presence of
strangers (c) for the purpose of securing primarily either (i) an
opinion of law or (ii) legal services or (iii) assistance in some
legal proceeding, and (d) not for the purpose of committing a
crime or tort; and (4) the privilege has been (a) claimed and
(b) not waived by the client.
Montgomery County v. MicroVote Corp., 175 F.3d 296, 301 (3d Cir. 1999); accord, e.g.,
McLaughlin, 3 Weinstein’s Federal Rules of Evidence, § 503.10, at 503-14 (2d ed. 1999):
In sum, a client . . . holds a privilege to refuse to disclose, and
to prevent any other person from disclosing confidential
communications . . . between the client (or his or her
representatives) . . . and the client’s lawyer (or certain
representatives of the lawyer) ... when the communications
were made to facilitate the rendition of professional legal
services . . . to the client.
(emphasis in original).
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And “[a]lthough the privilege belongs to the client, and only the client may
waive it, an attorney may assert the privilege on the client’s behalf. . . . Moreover, the
canons of ethics make the attorney’s common law obligation to maintain the secrecy of
his communications with his client a professional mandate.” Haines v. Liggett Group,
Inc., 975 F.2d 81, 90 (3d Cir. 1992). In addition,
[t]he attorney-client privilege is not restricted to the actual
communication by the client to the attorney. The privilege
ordinarily extends also to the attorney’s response to the
client’s request for legal advice because such response usually
effectively reveals the substance of the client’s confidential
communication to the attorney.
In re F.A. Potts and Co., 30 B.R. 708, 710 (Bankr. E.D. Pa. 1983) (citing Matter of
Fischel, 557 F.2d 209, 211 (9th Cir. 1977)); accord In re U.S. Healthcare, Inc. Securities
Litigation, 1989 WL 11068, at *3 (E.D. Pa. 1989).
In Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414 (3d
Cir. 1991), the Third Circuit noted that the attorney-client privilege is designed to
“‘protect[] only those disclosures—necessary to obtain informed legal advice—which
might not have been made absent the privilege.’” Id., at 1423-24 (quoting Fisher v.
United States, 425 U.S. 391, 403 (1976)). Therefore, the “voluntary disclosure to a third
party of purportedly privileged communications has long been considered inconsistent
with an assertion of the privilege.” Id., at 1424. “Consequently, it is well-settled that
when a client voluntarily discloses privileged communications to a third party, the
privilege is waived.” Id., at 1424.
Not every disclosure to a third party of information which would otherwise
fall within the scope of the attorney-client privilege results in the waiver of that privilege:
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When disclosure to a third party is necessary for the client to
obtain informed legal advice, courts have recognized
exceptions to the rule that disclosure waives the
attorney-client privilege. For example, courts have held that
the client may allow disclosure to an “agent” assisting the
attorney in giving legal advice to the client without waiving
the privilege. 8 Wigmore, Evidence § 2301 at 583
(McNaughton rev. 1961); McCormick, Evidence § 92 at 188.
Courts have also held that the client may disclose
communications to co-defendants or co-litigants without
waiving the privilege. See, for example, Hunydee v. United
States, 355 F.2d 183, 184-85 (9th Cir. 1965). These
exceptions are consistent with the goal underlying the
privilege because each type of disclosure is sometimes
necessary for the client to obtain informed legal advice.
Id., at 1424; accord, e.g., Advanced Technology Associates, Inc. v. Herley Industries,
Inc., 1996 WL 711018, at *5 (E.D. Pa. 1996); In re F.A. Potts and Co., 30 B.R. at 711
(“When an accountant is consulted by either the attorney or the client in connection with
the seeking or giving of legal advice, such consultation does not vitiate the attorney-client
privilege.”).
While it was originally the product of federal common law, see Hickman v.
Taylor, 329 U.S. 495 (1947), the work-product doctrine is now a component of the
federal rules of procedure governing the scope of discovery. Federal Rule of Civil
Procedure 26 is incorporated into bankruptcy proceedings such as this dispute under
Federal Rule of Bankruptcy Procedure 7026. Rule 26(b)(3) states in relevant part:
Trial Preparation: Materials. Subject to the provisions of
subdivision (b)(4) of this rule, a party may obtain discovery of
documents and tangible things otherwise discoverable under
subdivision (b)(1) of this rule and prepared in anticipation of
litigation or for trial by or for another party or by or for that
other party’s representative (including the other party’s
attorney, consultant, surety, indemnitor, insurer, or agent)
only upon a showing that the party seeking discovery has
substantial need of the materials in the preparation of the
party’s case and that the party is unable without undue
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hardship to obtain the substantial equivalent of the materials
by other means. In ordering discovery of such materials when
the required showing has been made, the court shall protect
against disclosure of the mental impressions, conclusions,
opinions, or legal theories of an attorney or other
representative of a party concerning the litigation.
In general, under Rule 26(b)(3), a party may not obtain discovery of
documents prepared by counsel in anticipation of litigation or for trial without showing a
“substantial need” for these documents. See Hickman v. Taylor. “The doctrine is
designed to protect material prepared by an attorney acting for his client in anticipation of
litigation. . . . Federal Rule of Civil Procedure 26(b)(3) makes clear, however, the
necessity that the materials be prepared in anticipation of litigation, and not ‘in the
ordinary course of business, or pursuant to public requirements unrelated to litigation.’”
United States v. Rockwell Int’l, 897 F.2d 1255, 1265-66 (3d Cir. 1990) (quoting United
States v. El Paso Co., 682 F.2d 530, 542 (5th Cir. 1982) (citation omitted). The Third
Circuit has explained that a document is prepared in “anticipation of litigation” even
when litigation is not imminent. The test is whether “in light of the nature of the
document and the factual situation in the particular case, the document can fairly be said
to have been prepared or obtained because of the prospect of litigation.” United States v.
Rockwell Intern., 897 F.2d at 1266. An objective standard is applied. See, e.g.,
Advanced Technology Associates, Inc. v. Herley Industries, Inc., 1996 WL 711018, at *6.
The purpose of the work-product doctrine differs from that of the attorney-
client privilege. The latter “promotes the attorney-client relationship, and, indirectly, the
functioning of our legal system, by protecting the confidentiality of communications
between clients and their attorneys. In contrast, the work-product doctrine promotes the
adversary system directly by protecting the confidentiality of papers prepared by or on
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behalf of attorneys in anticipation of litigation. Protecting attorneys’ work product
promotes the adversary system by enabling attorneys to prepare cases without fear that
their work product will be used against their clients.” Westinghouse Elec. Corp. v.
Republic of Philippines, 951 F.2d at 1428.
The difference in purpose between the work-product doctrine and the
attorney-client privilege has yielded a different approach to the concept of waiver of the
protection when communication is made to third parties:
A disclosure to a third party waives the attorney-client
privilege unless the disclosure is necessary to further the goal
of enabling the client to seek informed legal assistance.
Because the work-product doctrine serves instead to protect
an attorney’s work product from falling into the hands of an
adversary, a disclosure to a third party does not necessarily
waive the protection of the work-product doctrine. Most
courts hold that to waive the protection of the work-product
doctrine, the disclosure must enable an adversary to gain
access to the information. . . .
We agree that the purpose of the work-product doctrine
requires us to distinguish between disclosures to adversaries
and disclosures to non-adversaries.
Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d at 1428 (citations
omitted); accord, e.g., Cooper Hospital/University Medical Center v. Sullivan, 183 F.R.D.
119, 128 (D.N.J. 1998) (“Westinghouse draws a distinction ‘between disclosures to
adversaries and disclosures to non-adversaries. . . . Disclosures to non-adversaries do not
waive the privilege . . . .); Advanced Technology Associates, Inc. v. Herley Industries,
Inc., 1996 WL 711018, at *6.
In addition to the work-product doctrine and the attorney-client privilege,
the plaintiff and TCIE have raised the “common interest privilege,” also known as the
“joint defense privilege.” See generally In re Megan-Racine Associates, Inc., 189 B.R.
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562, 570 n.4 (Bankr. N.D.N.Y. 1995). Although this common law principle seems to
have been first applied in criminal cases, id., 189 B.R. at 571, it has also been utilized in
civil matters. See, e.g., Eisenberg v. Gagnon, 766 F.2d 770, 787-88 (3d Cir.), cert.
denied, 474 U.S. 946 (1985). The Third Circuit Court of Appeals has described the
common interest doctrine in the following manner:
Petitioners assert also that the joint defense privilege applies
here. Some explanation of this concept is in order. The
attorney-client privilege protects confidential communications
made to an attorney in his or her professional capacity, in
those instances in which a strict relation of attorney and client
exists. . . . This protection has been extended to
communications between different persons or separate
corporations when the communications are “part of an
on-going and joint effort to set up a common defense
strategy.” Eisenberg v. Gagnon, 766 F.2d 770, 787 (3d Cir.),
cert. denied, 474 U.S. 946 . . . (1985). “In order to establish
the existence of a joint defense privilege, the party asserting
the privilege must show that (1) the communications were
made in the course of a joint defense effort, (2) the statements
were designed to further the effort and (3) the privilege has
not been waived.” Matter of Bevill, Bresler & Schulman
Asset Management, 805 F.2d 120, 126 (3d Cir. 1986).
Haines v. Liggett Group, Inc., 975 F.2d 81, 94 (3d Cir. 1992); see also United States v.
Doe, 429 F.3d 450, 453 (3d Cir. 2005) (“The common interest privilege allows for two
clients to discuss their affairs with a lawyer, protected by the attorney-client privilege, so
long as they have an ‘identical (or nearly identical) legal interest as opposed to a merely
similar interest.’”) (quoting F.D.I.C. v. Ogden Corp., 202 F.3d 454, 461 (1st Cir.2000)).
As mentioned earlier, the communication of information covered by
attorney-client privilege may be waived in some instances by its disclosure to a third
party. Similarly, a party may have to disclose information otherwise within the scope of
the attorney work-product doctrine if an adversarial party has obtained this work product.
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See Westinghouse Elec. Corp. v. Republic of Philippines. “The joint-defense privilege
acts as an exception to these general waiver rules in order to facilitate cooperative efforts
among parties who share common interests.” In re Megan-Racine Associates, Inc., 189
B.R. at 571.
The application of this doctrine requires that the communications be made
to a third party “in the course of a joint defense effort.” Matter of Bevill, Bresler &
Schulman Asset Management Corp., 805 F.2d 120, 126 (3d Cir. 1986). Although this
typically will require that all parties to the communication understand its confidential
nature and be working toward a jointly held goal, there need not be a written agreement to
such effect. In re Megan-Racine Associates, Inc., 189 B.R. at 571-72. Furthermore, the
common interests of the parties must transcend similar commercial interests and involve
common legal interests. Id., at 573. “A common legal interest exists where the parties
asserting the privilege were co-parties to litigation or reasonably believed that they could
be made a party to litigation.” Id., at 573; accord, e.g., Walsh v. Northrop Grumman
Corp., 165 F.R.D. 16, 18 (E.D.N.Y. 1996). For example, one court has held that, in the
context of the chapter 11 bankruptcy process, given the statutory roles of an official
creditors’ committee and the debtor in possession these two entities shared a common
legal interest when communications among the committee, the debtor and debtor’s
counsel took place, precluding the waiver of attorney-client privilege. In re Mortgage &
Realty Trust, 212 B.R. 649, 653-54 (Bankr. C.D. Cal. 1997).
It must also be understood that the common interest or joint defense
“privilege” is not itself an evidentiary privilege. Instead, when it applies, it protects from
disclosure information that would not otherwise be discoverable. Thus, it can only be
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Some courts limit the joint defense doctrine to situations involving actual or4
potential litigation. Since the work product doctrine is also applicable only when litigation is
anticipated or actually occurring, the overlap of the waiver exceptions to these two doctrines is
more complete than the overlap with the waiver principles associated with attorney-client
privilege. This privilege applies to communications in any legal setting, regardless of any
anticipation of litigation. See generally Fischer, The Attorney Client Privilege Meets the
Common Interest Arrangement: Protecting Confidences While Exchanging Information for
Mutual Gain, 16 Rev. Litig. 631, 663 nn. 28-30 (Summer 1997).
13
relevant when there is an underlying privilege covering the information sought. In re
Megan-Racine Associates, Inc., 189 B.R. at 571.
Although the joint defense doctrine has been expressly acknowledged
within this circuit, its application may overlap with the generally recognized exceptions to
the waiver of privileged information by dissemination to third parties previously
discussed. It would appear that a third party holding a common legal interest would not
likely be viewed as an “adversary” were that entity to receive attorney work product. And
it is possible that if information subject to attorney-client privilege were communicated as
part of a joint defense, such communication could be considered as “made in the course
and for the purpose of obtaining legal advice” or as “necessary for obtaining” legal
advice. Advanced Technology Associates, Inc. v. Herley Industries, Inc., 1996 WL
711018, at *5. 4
The decision Matter of Celotex Corp., 196 B.R. 596 (Bankr. M.D. Fla.
1996), implicitly recognizes this overlap. That dispute involved an adversary proceeding
brought by official creditor committees against various defendants who were insiders of
the corporate debtor and who would own 80% of the reorganized debtor under the chapter
11 plan then proposed by the debtor. The plaintiff committees opposed this plan and had
commenced litigation in connection with various transfers between these defendants and
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The citation to Duplan refers to Duplan Corp. v. Deering Milliken, Inc., 397 F.5
Supp. 1146 (D.S.C. 1974), which provided an early analysis of the “common interest” doctrine.
14
the debtor. In the course of that adversary proceeding, the plaintiffs sought production of
documents prepared postpetition by the debtor’s attorneys and financial consultants, and
provided to the defendants. “[T]he documents sought pertain specifically to the
formulation of the plan of reorganization proposed by Debtor.” Id., 196 B.R. at 598.
The Celotex court denied the committees’ motion to compel production and
in doing so rejected the committees’ argument that the work-product doctrine and
attorney-client privilege associated with these documents had been waived by
dissemination to the defendants. Implicitly, it relied upon the traditional exceptions to
waiver of these evidentiary protections from discovery because the documents were all
prepared and communicated for the purpose of formulating the legal reorganization
strategy. In addition, the court noted:
As this Court finds the ten documents in question fit within
the more common areas of attorney-client privilege and work
product doctrine, the line of cases following Duplan may be
outside the scope of this Court’s determination. Nonetheless,
Duplan reveals an interpretation of community of interest
sufficiently broad to encompass Debtor and Defendants in the
case at bar. In any instance, the Debtor and Defendants share
common legal interests in this and the general bankruptcy
case--not solely commercial interests (a melange).
Id., 196 B.R. at 600-01. 5
With this framework for attorney-client privilege, joint defense privilege
and work product doctrine in mind, I have reviewed in camera copies of numerous
documents claimed as privileged by the plaintiff. Although there were 148 separately
tabbed documents, I note that the plaintiff has represented that some documents have
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The documents provided to movants were identified as ##90-91, 105, 113-15,6
129, 140, 143, and 146. Movants’ response simply lists these documents as no longer
challenged.
The documents for which movants’ challenge to plaintiff’s assertion of privilege7
has been withdrawn were identified as ##19, 33, 84, 106-12, 117-19, 122-28, 131-36, 138-39,
and 148. Movants’ response supports this withdrawal.
I shall direct the plaintiff to produce final versions of those attachments to the8
extent they were filed with third-party entities.
15
been provided to the movants, and that, as to others, the movants no longer challenge the6
plaintiff’s assertion of privilege. 7
Virtually all of the documents asserted to be non-discoverable are copies of
e-mail messages. In many instances, those messages became part of a chain and were
repeated. A few messages contained attachments. All of the messages appear to concern
issues surrounding TCIE that arose after TCI filed its bankruptcy petition including: the
plaintiff’s administration of this corporate affiliate of the debtor under relevant non-
bankruptcy law; the sale of TCIE’s assets; the satisfaction of TCIE’s debt to Bank of
America; the agenda for meetings of directors and shareholders; the minutes of those
meetings; the lawsuit brought against TCIE by Canam Steel; and the renaming of TCIE.
Some of the attachments are drafts of documents that probably were later filed in court
after revision, based upon advice of counsel. 	None of the documents appear to concern8
advice to the plaintiff regarding the Murphy Oil or Pisces judgments.
Most of the documents represent communications between the plaintiff and
his attorneys, or to or from TCIE’s attorneys—typically to or from the plaintiff/and or the
directors of TCIE. Some documents involve information communicated by agents acting
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The issues surrounding movants’ challenges to the plaintiff’s privilege log were9
well-analyzed recently in the following manner:
Plaintiff requests a determination that defendant has waived its
right to withhold responsive documents on grounds of privilege,
given defendant’s delay in providing a privilege log in the first
instance, and the defects in the privilege log ultimately provided by
the time of hearing. Defendant provided its initial discovery
responses on January 8, 2007, without providing a privilege log.
On January 12, 2007, during a meet-and-confer session and after
plaintiff’s counsel pointed out the lack of a privilege log, defendant
produced a log, to which plaintiff objected as deficient. On
January 30 and again on February 2, 2007, defendant provided an
amended, superseding privilege log. Plaintiff continues to object
that certain required information is not included for certain
documents identified on the privilege log. At hearing, plaintiff’s
counsel confirmed that he continues to seek a ruling that defendant
has waived its privileges.
It is undisputed that defendant has the burden of establishing its
right to stand on a privilege as grounds for withholding an
otherwise responsive document. In re Subpoena Duces Tecum,
439 F.3d 740, 750 (D.C. Cir. 2006). The Federal Rules for some
time have required that when a party withholds information on
grounds of privilege, that party must describe the information with
sufficient particularity to allow the requesting party to assess the
applicability of the privilege. Id. at 750-51 (to meet burden of
establishing that information warrants withholding, defendant must
present evidence “sufficient . . . to establish the privilege . . . with
reasonable certainty” ); Fed. R. Civ. P. 26(b)(5)(A). The requisite
detail for inclusion in a privilege log consists of a description of
responsive material withheld, the identity and position of its
author, the date it was written, the identity and position of all
addressees and recipients, the material’s present location, and
(continued...)
16
at the request of plaintiff’s counsel. In many instances, copies of messages were sent to
the plaintiff’s attorneys or to TCIE’s attorneys.
The amended privilege log associated with these documents specifies the
privilege asserted and thus corrects any defect in any earlier privilege log. See U.S. v.
Union Pacific R. Co., 2007 WL 1500551, at *3-*4 (E.D. Cal. 2007). 	Here, the9
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(...continued)9
specific reasons for its being withheld, including the privilege
invoked and grounds thereof. United States v. Construction
Products Research, Inc., 73 F.3d 464, 473 (2d Cir. 1996). On its
face, Rule 26 does not require that a requesting party ask for a log
of claimed privileges, if one has been prepared; rather it is the
responding party’s duty to offer one. In evaluating whether a
waiver should be found when a party does not provide a privilege
log at the same time that responsive information is produced, a
court uses the initial due date for a response as a “default
guideline,” while making a “case-by-case determination,” taking
into account the following factors:
the degree to which the objection or assertion of privilege enables
the litigant seeking discovery and the court to evaluate whether
each of the withheld documents is privileged (where providing
particulars typically contained in a privilege log is presumptively
sufficient and boilerplate objections are presumptively
insufficient); the timeliness of the objection and accompanying
information about the withheld documents (where service within
30 days, as a default guideline, is sufficient); the magnitude of the
document production; and other particular circumstances of the
litigation that make responding to discovery unusually easy (such
as, here, the fact that many of the same documents were the subject
of discovery in an earlier action) or unusually hard. Burlington
Northern & Santa Fe Rwy. Co. v. U.S. Dist. Court, 408 F.3d 1142,
1149 (9th Cir.), cert. denied, — U.S. —, 126 S. Ct. 428, 163
L.Ed.2d 326 (2005). The determination should reflect a “holistic
reasonableness analysis, intended to forestall needless waste of
time and resources, as well as tactical manipulation of the rules and
the discovery process.” Id. While taking account of applicable
local rules and stipulations by the litigants, the exercise is not “a
mechanistic determination of whether the information is provided
in a particular format.” Id.
In Burlington Northern, the responding party, a sophisticated
corporation like defendant here, was found to have waived its
privileges when it provided a privilege log five months after its
initial responses to discovery requests were due. Id. at 1149-50.
Here, where defendant provided an initial privilege log within four
days of its initial production, and amended logs in less than a
month, the court declines to make a finding of waiver. Defendant
is cautioned, however, that the determination made in this instance
(continued...)
17
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(...continued)9
is not a license to take as long in the future to provide an
appropriately detailed log.
U.S. v. Union Pacific R. Co., 2007 WL 1500551, at *3-*4.
Documents ##9 and 10 are duplicative of #7.10
This appears duplicated in document #85.11
18
plaintiff’s correction of his privilege log was sufficiently prompt as to avoid a waiver of
all privilege.
Furthermore, upon my review of this amended privilege log, while one may
debate whether every document is indeed protected by all of the privileges identified on
the log by the plaintiff, I agree that, except for the following, the documents fall within
the scope of attorney-client privilege, work product protection, and/or the common
interest privilege involving third-party communications. The documents that must be
produced as not protected by any privilege are:
Document #7—plaintiff need produce only that portion of the
document which is a copy of an e-mail from Vertommen to
Miller dated 10/27/04 concerning Fortes Bank involved in the
potential sale of TCIE. No attorney-client privilege is
involved in this issue. 10
Document #17—plaintiff need produce only that portion of
the document which is a copy of an e-mail dated 9/26/06 from
Herschman to Coren. No attorney-client privilege is involved
with that communication from Canam Steel counsel to
plaintiff’s counsel.
Document #21—plaintiff need produce only that portion of
the document which is a copy of an e-mail dated
4/28/06 from Rice to Meersseman. 	No attorney-client11
privilege is involved with that communication regarding the
TCIE Board Meeting between directors simply because a
copy was sent to TCIE counsel.
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This e-mail is replicated in document #34.12
Duplicated in documents ##86 and 87.13
19
Documents ##23 & 24—plaintiff need produce only that
portion of the documents which are copies of e-mails dated
1/10/06 and 1/6/06 from Miller to Meersseman. The opinions
of Miller expressed therein are not protected by attorney-
client privilege. 12
Document #57—plaintiff need produce only that portion of
the document which is a copy of an e-mail dated 1/9/06 from
Miller to Rice involving tax payments.
Document #61—plaintiff need produce only that portion of
the document which are copies of e-mails dated 5/1/06 from
Rice to Meersseman and from Meersseman to Rice; and dated
4/29/06 from Rice to Meersseman. 13
In so finding, I agree with the plaintiff and TCIE that the communications
between the plaintiff and TCIE’s counsel, or between plaintiff’s counsel and TCIE, or
between plaintiff’s counsel and TCIE’s counsel, were part of a common defense to the
claims made by Canam Steel against TCIE and Miller, or involve Miller’s control of
TCIE that are being challenged by Canam Steel or its assignee. I further agree with
plaintiff that certain documents are covered by the work-product doctrine and were never
revealed to adverse parties.
Finally, while none of the documents reviewed in camera involved advice
from Mr. Miller’s attorneys regarding setting aside the Pisces or Murphy Oil judgments,
in the interest of completeness I conclude that the plaintiff did not waive attorney-client
privilege in his response to interrogatories. However, at trial, he will not be permitted to
assert an advice of counsel defense to the counterclaims and third-party claims made
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20
against him. See Smithkline Beecham Corp. v. Apotex Corp., 2005 WL 2436662, at *4-
*5 (E.D. Pa. 2005).
And appropriate order shall be entered.
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UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re 	: 	Chapter 11
TOTAL CONTAINMENT, INC. 	:
Debtor 	: 	Bankruptcy No. 04-13144bif
____________________________________
GEORGE L. MILLER, Chapter 11 trustee 	:
Plaintiff 	:
v. 	:
MARCEL DUTIL, et al. 	:
Defendants 	: 	Adversary No. 05-0145
____________________________________
..............................................................
ORDER
..............................................................
AND NOW, this 18th day of June 2007, for the reasons stated in the
accompanying memorandum, it is hereby ordered that defendants Canam Steel
Corporation and Finloc, Inc.’s motion to compel is denied in large part, as follows:
1. The plaintiff need only supplement his answers to movants’
interrogatories as agreed in his supplementary memorandum at 4, n.1;
2. Plaintiff shall produce to movants within ten days copies of those
documents identified above as not privileged; and
3. Plaintiff shall also produce to movants within ten days (if he has not
previously done so) final copies of Miller affidavits, as well as final copies of TCIE
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corporate documents referred to in his privilege log, if such documents were filed with
any court or governmental agency (including foreign governmental agencies).
BRUCE FOX
United States Bankruptcy Judge
copies to:
Phillip E. Wilson, Esquire
Piper Rudnick
One Liberty Place
1650 Market Street, Suite 4900
Philadelphia, PA 19103
Mark J. Friedman, Esquire
Anthony P. Ashton, Esquire
DLA Piper US LLP
6225 Smith Avenue
Baltimore, MD 21209
Craig Martin, Esquire
Edwards Angell Palmer & Dodge LLP
919 North Market Street
Wilmington, DE 19801
Steven M. Coren, Esquire
David Dormont, Esquire
Kaufman, Coren & Ress, P.C.
1717 Arch Street, Suite 3710
Philadelphia, PA 19103
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