SARAH NETBURN, Magistrate Judge.
On October 24, 2017, the Court issued an Opinion and Order holding that Defendants had "failed to remedy the many deficiencies in their privilege log and document production." ECF No. 287 at 1. The Court ordered Defendants to produce 19 out of 20 documents that were submitted for in camera review. Id. at 19-20. The Court also directed Defendants to review the fifth iteration of their privilege log (the "Fifth Log") and all of the documents they had withheld and produce additional documents in accordance with the guiding principles the Court had established.
In addition, in the October 24, 2017 Opinion and Order, the Court granted Plaintiffs leave "to file a motion for sanctions in the form of an award of attorneys' fees incurred in reviewing and litigating issues related to Defendants' Fifth Log." ECF No. 287 at 20. Plaintiffs have now filed a motion for attorneys' fees. ECF No. 292. Plaintiffs' motion for attorneys' fees is GRANTED in part and DENIED in part. Plaintiffs are awarded $20,087 in attorneys' fees and $325.89 in expenses.
Motions for reconsideration under Local Civil Rule 6.3 are governed by the same standard as motions under Federal Rules of Civil Procedure 59(e) and 60(b).
In the October 24, 2017 Opinion and Order, the Court held that documents Defendants or their counsel prepared before January 1, 2015, are not covered by work product immunity because the possibility of litigation was too remote before that date. ECF No. 287 at 7. Defendants now ask the Court to "reconsider that date with respect to five documents on [their] privilege log." ECF No. 294 at 5. The Fifth Log lists Documents 51, 58, 67, 70, and 74 as work product, identifies specific attorneys who purportedly prepared them, and states that they were prepared in November 2013. ECF No. 294-1 at 2. Defendants contend that "these documents were both properly withheld from production and were properly logged"; therefore, they ask the Court to permit them to continue withholding the documents. ECF No. 294 at 5. Defendants are essentially asking the Court to conduct another in camera review of documents. The Court is hesitant to engage in this exercise again, particularly in light of the fact that the Court has already reviewed exemplars in camera on three prior occasions. Nevertheless, the Court will entertain Defendants' request under these limited circumstances to prevent manifest injustice.
As discussed in the Court's previous opinions and orders, work product immunity "shields materials prepared in anticipation of litigation or for trial."
In addition, when a party withholds documents based on work product immunity, Federal Rule of Civil Procedure 26 requires the party to "expressly make the claim" and "describe the nature of the documents, communications, or tangible things not produced or disclosed—and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim." Fed. R. Civ. P. 26(b)(5)(A). Local Civil Rule 26.2 also requires the party asserting the privilege to describe:
Local Civil Rule 26.2(a)(2)(A). Failure to provide the information required by Rule 26 or Local Civil Rule 26.2 may result in a waiver of privilege. Fed. R. Civ. P. 26 Advisory Committee's note to 1993 amendment;
Document 51 is a memorandum from Key Wynn, an attorney at YKK Corporation of America ("YCA"), to Jim Reed, who was then the Chief Legal Counsel of YCA. ECF No. 294 at 6. The memorandum examines the roles of judges and juries in determining the meaning of ambiguous contract terms and also discusses who authored the exclusive licensing agreement at issue in this case.
Document 58 contains calculations of potential damages that might be imposed by a judge and jury if Defendants were sued in connection with their sales of polyurethane zippers. ECF No. 294 at 6. The Fifth Log states that the document was prepared by Attorney Reed on November 14, 2014, and identifies it as a "[c]onfidential document reflecting attorney input regarding negotiation strategy." ECF No. 294-1 at 2. According to their motion for reconsideration, Defendants described the document as relating to "negotiation strategy" because the calculations were used to assess what amount Defendants should offer to Plaintiffs in attempt to avoid litigation. ECF No. 294 at 7. But this is precisely the type of after-the-fact explanation the Court rejected in the October 24, 2017 Opinion and Order. ECF No. 287 at 5. The Court will rely solely on the Fifth Log's description and will not consider the additional context provided in Defendants' recent motion papers. See id. Document 58 itself makes no mention of negotiations and gives no indication that the calculations were used in formulating an offer to avoid threatened litigation. Thus, "negotiation strategy" is not an apt description of the document's subject matter. The description is vague and does not provide sufficient information to enable other parties to assess the claim of privilege. Moreover, even if the document is viewed as relating to "negotiation strategy," this phrase suggests that the document concerns negotiations, rather than litigation, undermining Defendants' claim that it constitutes work product. Either way, Defendants waived any claim of work product immunity by failing to provide an adequate description of the document in the Fifth Log. Document 58 must be produced.
Document 67 consists of PowerPoint slides analyzing the claims Plaintiffs might bring if they initiated litigation against Defendants in connection with the exclusive licensing agreement, the potential damages associated with those claims, Defendants' potential defenses, and other legal strategies Defendants could utilize.
Document 70 is a PowerPoint presentation prepared by Attorney Reed on November 15, 2013. ECF No. 294 at 8. The document discusses Plaintiffs' possible claims against Defendants in connection with the exclusive licensing agreement as well as potential damages, defenses, and legal strategies associated with those claims.
Document 74 consists of PowerPoint slides discussing Plaintiffs' potential claims against Defendants with respect to the exclusive licensing agreement and Defendants' sales of polyurethane zippers. ECF No. 294 at 8-9. The document also discusses litigation strategies Defendants might use in connection with those potential claims.
In sum, Defendants' motion for reconsideration is GRANTED in part and DENIED in part. Defendants must produce Documents 51 and 58 immediately, but they may continue to withhold Documents 67, 70, and 74. To be clear, this decision does not enable Defendants to withhold other documents prepared before January 1, 2015, on the basis of work product immunity. This was Defendants' one opportunity to make arguments to the Court that documents predating January 1, 2015, were covered by work product immunity. The Court is allowing a limited exception to its prior ruling that is solely applicable to Documents 67, 70, and 74, but the October 24, 2017 decision remains in effect with respect to all other documents listed in the Fifth Log and any other privilege logs Defendants have previously produced.
A decision to clarify an order previously issued falls "within the sound discretion of the district court."
"Defendants seek clarification with respect to a set of three nearly identical documents that include a document that may be accurately characterized as an outside counsel presentation." ECF No. 294 at 2. Defendants contend that the original outside counsel presentation "was properly identified, separately, as attorney-client privileged" in the Fifth Log. Id. Thus, they argue that the presentation should be redacted from the three other documents as well. Id. at 3-5. Plaintiffs have been almost entirely unhelpful in their opposition to Defendants' motion for clarification. Instead of responding to the arguments raised in Defendants' motion, Plaintiffs raise a variety of new disputes relating to the production of documents and the interpretation of the Court's previous orders. To avoid further disputes, the Court will provide clarification on a few important issues. Defendants' motion for clarification is GRANTED.
Document 505 consists of a PowerPoint presentation that was prepared in 2014 by Attorney Reed, who was then YCA's Chief Legal Counsel, and Attorney Jim Ewing, who was Defendants' outside litigation counsel at the time.
Defendants argue that there was no way for them to identify the specific members of the legal department who were involved in preparing Documents 340-342. ECF No. 294 at 4 n.6. But Defendants have now determined that Documents 340-342 include a presentation drafted by Attorneys Reed and Ewing.
Nevertheless, the Court is satisfied that the substance of Document 505 was adequately described in the Fifth Log. Defendants clearly and accurately described the original PowerPoint presentation, its authors, and its content. The fact that they did not identify the same information for Documents 340-342 is certainly not ideal, but this shortcoming does not mean that Defendants entirely waived their claim of privilege with respect to the original PowerPoint presentation. To hold otherwise would elevate form over function. Defendants may produce Documents 340-342 with the PowerPoint presentation from Document 505 redacted.
Next, the parties have explained to the Court that Defendants' Fifth Log did not include all of the documents Defendants have withheld as privileged. ECF No. 299 at 3. It seems the Fifth Log was intended to supplement, rather than replace, earlier versions of Defendants' privilege log. ECF No. 299 at 3; ECF No. 302 at 6. Documents listed in the second iteration of Defendants' privilege log (the "Second Log") were not incorporated into the Fifth Log. ECF No. 299 at 3; ECF No. 302 at 6. Yet Defendants have continued to withhold documents listed in the Second Log—and apparently have not applied the Court's October 24, 2017 Opinion and Order to the documents listed in the Second Log—based on the understanding that the Court had previously ruled on all of the privilege claims in the Second Log. ECF No. 299 at 3.
This issue apparently came to Plaintiffs' attention shortly after the October 6, 2017 conference.
To be clear, the guiding principles established in the Court's prior orders did not apply to discrete privilege logs or sets of documents. The Court has repeatedly directed Defendants to review all of the documents in their privilege log and produce documents in accordance with the Court's orders. In each case, the Court's directions were based on the assumption that the latest version of the privilege log listed all outstanding claims of privilege. The parties must apply all of the Court's rulings in this matter to all of the documents Defendants have withheld. Any documents that should have been produced under principles established in any prior order of the Court must be produced immediately.
Moreover, in order to ameliorate the privilege log issue, within three weeks of the date of this Opinion and Order, Defendants are ORDERED to produce a single final version of the privilege log (the "Final Log") that lists all of the documents for which they maintain privilege claims. In preparing this Final Log, Defendants may not add any documents that were not included in the Second and Fifth Logs and may not change the descriptions used in those two privilege logs. If a document is listed in both the Second and Fifth Logs, the description in the Fifth Log shall be used in the Final Log and shall be controlling. Any documents not listed in the Final Log must be produced within three weeks of this Opinion and Order.
Finally, Plaintiffs have interpreted the Court's October 24, 2017 Opinion and Order to hold that the phrase "litigation strategy" is impermissibly vague in all circumstances. ECF No. 299 at 5. Plaintiffs' interpretation is incorrect. Any phrase used in Defendants' privilege log must be viewed in the context of the description as a whole. For example, Document 4929 is an e-mail discussing an attorney's interpretation of the exclusive licensing agreement and the legal implications of that interpretation. Yet the Fifth Log described Document 4929 as a "[c]onfidential communication reflecting attorney-client communication and counsel's thoughts and strategy regarding litigation strategy." This confusingly worded phrase is not a fitting descriptor of the information contained in the e-mail, and to the extent the description comports with the e-mail's content, the description is most certainly vague.
Therefore, Defendants are ORDERED to review every entry in the Second and Fifth Logs and determine whether the entry (1) lists all of the information required by Local Civil Rule 26.2, (2) accurately describes the document and its subject matter, and (3) describes the document and its subject matter with sufficient specificity to enable other parties to assess the claim of privilege. Any documents that do not meet these requirements must be produced within three weeks of the date of this Opinion and Order.
Determining whether sanctions are appropriate is "one of the most difficult and unenviable tasks for a court."
In addition, Rule 37(b)(2) provides that when a party "fails to obey an order to provide or permit discovery . . . the court where the action is pending may issue further just orders," including ordering the disobedient party "to pay the reasonable expenses, including attorney's fees, caused by the failure." Again, the Court should not impose this sanction if "the failure was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(b)(2)(C).
An award of attorneys' fees is appropriate in this case. The Court has conducted three previous in camera reviews of documents that Defendants withheld, and each time, the Court has compelled Defendants to review their privilege logs and produce additional documents in accordance with the law.
Defendants contend that they should not be required to pay Plaintiffs' attorneys' fees because the Court did not hold that their privilege log was deficient prior to the October 24, 2017 Opinion and Order. ECF No. 300 at 5, 8-9. In response to the Court's prior orders, Defendants purportedly focused their efforts on reviewing the substance of withheld documents but "did not understand that revising the description in the privilege log itself was also required."
Defendants also point out that Plaintiffs' own privilege log is riddled with many of the same deficiencies that were present in Defendants' privilege logs. ECF No. 300 at 5-8. Defendants argue that it "would be unjust and inequitable to award Plaintiffs their costs and fees incurred in reviewing Defendants' `inadequate' privilege log, when Plaintiffs' is equally `inadequate.'"
Finally, Defendants contend that the October 24, 2017 Opinion and Order already imposed a severe sanction on Defendants by compelling them to produce "nearly two thousand privileged documents."
Having decided that Plaintiffs are entitled to recover reasonable attorneys' fees and expenses incurred in connection with the Fifth Log, the Court must now determine the amount to award. "District courts have broad discretion to determine a fee award based on the circumstances of a case."
Plaintiffs submit that nine different attorneys and law clerks collectively spent over 180 hours litigating issues related to Defendants' Fifth Log and the 20 exemplars that were recently reviewed in camera. See ECF No. 292 at 5; ECF No. 292-3; ECF No. 292-4. Their hours and billable rates break down as follows:
ECF Nos. 292-1, 292-4.
The hourly rates for Plaintiffs' counsel are reasonable in light of the attorneys' positions, their levels of experience, and the prevailing rates in the community.
Nevertheless, the number of hours Plaintiffs spent on these issues was vastly excessive. Plaintiffs did not have access to the 20 exemplars that were submitted for in camera review. Thus, they acknowledged that in preparing their letter to the Court regarding the privilege log and exemplars, they relied solely on the information included in Defendants' privilege log and Defendants' letter to the Court. ECF No. 253 at 2. In light of these limitations, it is unclear why Plaintiffs spent over 180 hours reviewing documents, conducting legal research, drafting letters, corresponding with co-counsel and opposing counsel, and preparing for and attending the conference. Plaintiffs have not explained why they spent so much time on these issues.
Accordingly, Plaintiffs' hours are reduced by approximately 70% across the board, which yields the following fees:
In addition, Plaintiffs seek $325.89 for the cost of obtaining a transcript of the conference held on October 6, 2017. ECF No. 292-2. In support of this request, Plaintiffs have submitted an invoice from Southern District Reporters PC.
Finally, Plaintiffs wish to recover additional attorneys' fees and expenses in connection with their review of the documents that were recently produced.
For the foregoing reasons, Defendants' motion for reconsideration is GRANTED in part and DENIED in part, and their motion for clarification is GRANTED. In addition, Defendants are ORDERED to review all of the documents they have previously withheld as privileged— whether listed on the Fifth Log or some earlier iteration of the privilege log—and immediately produce additional documents in accordance with this Opinion and Order and all of the Court's previous orders regarding privilege. Within three weeks of this Opinion and Order, Defendants are ORDERED to produce a Final Log according to the process described herein. Finally, Plaintiffs' motion for attorneys' fees is GRANTED in part and DENIED in part. Plaintiffs are awarded $20,087 in attorneys' fees and $325.89 in expenses for a total award of $20,412.89. The Clerk of Court is respectfully asked to terminate the motions at ECF Nos. 292 and 293.