AMY BERMAN JACKSON United States District Judge.
On April 1, 2015, pursuant to Local Civil Rule 72.2(a), this case was referred to Magistrate Judge G. Michael Harvey for the resolution of several discovery disputes. Referral to M.J. Order [Dkt. # 67]. The disputes arose when plaintiff propounded discovery requests seeking communications between the defendant, which is a law firm involved in debt collection, and Sunrise Credit Services, Inc. See Mem. Op. (July 31, 2015) [Dkt. # 81] at 6-7. Defendant asserts that Sunrise was acting as the agent for Arrowood Indemnity Company, to whom plaintiff owed a debt, when Sunrise retained defendant on Arrowood's behalf to sue on that debt. Def.'s Reply to Pl.'s Resp. to Supp. Privilege Log, Aff. & Errata [Dkt. # 80] at 2 & n.1. Defendant refused to produce the documents plaintiff sought on the grounds that they were privileged communications between an attorney (defendant) and its client (Arrowood), made through the client's agent (Sunrise). Id.; see also Mem. Op. (July 31, 2015) at 1, 6-7.
On May 20, 2015, plaintiff filed a motion to compel the production of those records and others, objecting to, among other things, defendant's withholding of documents based on "false claims of privilege." Pl.'s Mot. to Compel Produc. of Docs. & Resps. to Interrogs. [Dkt. # 69] ("Pl.'s Mot.") at 1. On June 29, the Magistrate Judge granted plaintiff's motion in part and denied it in part, and he ordered defendant to respond to some, but not all, of the disputed discovery requests. Order (June 29, 2015) [Dkt. # 75]. He also ordered "that each side shall bear its own costs related to plaintiff's motion to compel." Id. at 4. Finally, the Magistrate Judge held plaintiff's motion to compel in abeyance with respect to defendant's claims of attorney-client and work-product privilege, and he ordered defendant to produce a revised privilege log to plaintiff and to submit the allegedly privileged documents for in camera review. Id. at 2-3.
After reviewing the documents, the Magistrate Judge concluded that Sunrise was acting as Arrowood's agent in its role as intermediary between Arrowood and defendant, and that the attorney-client privilege could therefore apply to the communications between defendant and Sunrise. Mem. Op. (July 31, 2015) at 7-9. He found that some of the communications defendant had identified as privileged had "nothing to do with the provisioning or seeking of legal advice," a prerequisite to the application of the attorney-client privilege,
On August 14, 2015, plaintiff filed her objections to the Magistrate Judge's Orders of June 29 and July 31. Pl.'s Objs. to the Magistrate's June 29, 2015 & July 31, 2015 Orders [Dkt. # 87] ("Pl.'s Objs."). Plaintiff "objects to the Magistrate's determination that the documents withheld by the Defendant and identified in the Court's July 31st Order are privilege [sic] based on Defendant's assertion of attorney-client privilege and work product on behalf of an entity not a party to the instant lawsuit." Id. at 1. She also objects to the June 29 Order denying her attorneys' fees and costs for the litigation of the discovery dispute. Id. at 1-2. Defendant responded to plaintiff's objections on August 21, 2015. Def.'s Resp. to Pl.'s Objs. [Dkt. # 89].
A court may refer nondispositive matters, including discovery disputes, to a magistrate judge for resolution. Fed. R.Civ.P. 72(a); LCvR 72.2(a). Upon referral, the magistrate judge must "promptly conduct the required proceedings and, when appropriate, issue a written order stating the decision." Fed.R.Civ.P. 72(a); see also LCvR 72.2(a). Any party may file written objections to the magistrate judge's decision "within 14 days after being served with the order of the magistrate judge." LCvR 72.2(b); see also Fed. R.Civ.P. 72(a). The court shall consider timely objections and "may modify or set aside any portion of a magistrate judge's order ... found to be clearly erroneous or contrary to law." LCvR 72.2(c); see also Fed.R.Civ.P. 72(a).
After reviewing in camera the documents over which defendant asserted privilege, the Magistrate Judge determined
Both Maryland and the District of Columbia recognize that the attorney-client privilege protects communications not only between a client and an attorney, but also between their agents.
The Magistrate Judge specifically determined that "Sunrise acted as Arrowood's agent for obtaining legal advice from defendant," making the attorney-client privilege enforceable. Mem. Op. (July 31, 2015) at 7-8. Plaintiff objects to this finding, and she contends that Sunrise was not Arrowood's agent and that "at all times relevant Defendant was acting in its capacity as a debt collector and not as an attorney." Pl.'s Objs. at 2-3.
At bottom, most of plaintiff's objections boil down to her claim that defendant failed to offer evidence sufficient to show an agency relationship between Arrowood and Sunrise that would give rise to an attorney-client privilege. See, e.g., id. at 2 ("Defendant has not established with evidence that it had an attorney-client relationship with Arrowood as oppose [sic] to a mere debt collector-corporate client relationship during the relevant period."); id. at 3 ("[T]hough it is Defendant's burden, Defendant did not prove that Sunrise is a `forwarder'...."); id. at
A party asserting the attorney-client privilege "must present `affidavits or other competent evidence' that `support[s] each of the essential elements necessary to sustain a claim of privilege.'" Zelaya v. UNICCO Serv. Co., 682 F.Supp.2d 28, 38 (D.D.C.2010), quoting Alexander v. FBI, 192 F.R.D. 42, 45 (D.D.C.2000). Defendant provided such evidence in this case. For example, the Magistrate Judge found that "Arrowood hired Sunrise for the limited purpose of finding an attorney to help Arrowood collect plaintiff's debt" based on the record evidence offered by defendant, including two authorizations by Arrowood for Sunrise to retain counsel. Mem. Op. (July 31, 2015) at 8, citing Ex. 4 to Def.'s Opp. to Pl.'s Mot. [Dkt. # 72-2] at 42 (January 23, 2013 "Authorization for Suit" given by Arrowood to Sunrise in plaintiff's case), and Ex. 4 to Def.'s Opp. to Pl.'s Mot. [Dkt. # 72-3] at 64 (October 25, 2012 "Authorization for Suit"). Defendant also submitted an affidavit describing its relationship with Arrowood and Sunrise. Ex. 5 to Def.'s Opp. to Pl.'s Mot. [Dkt. # 73-4] ¶¶ 4-5 (stating that "[d]efendant was retained to pursue collection of student loan accounts owed by the Plaintiff to Arrowood" and that "[r]eferral of the matters for collection in litigation was made by Arrowood's authorized agent Sunrise").
Upon review of defendant's submissions, the Magistrate Judge determined that the record "does not reflect that Sunrise ever undertook direct collection actions against plaintiff such as sending a dunning letter or making collection calls,"
Plaintiff complains that defendant failed to meet its evidentiary burden on the issues of its role as an attorney and the agency relationship between Sunrise and Arrowood, but she has not cited to any contrary evidence in the record or any persuasive legal authority to show that the Magistrate Judge's decision should be overturned.
Plaintiff further argues that no attorney-client privilege can exist where the client, and not the attorney, is the one responsible for hiring the agent. Pl.'s Objs. at 4-6, 21 (arguing that in the cases cited by the Magistrate Judge, "it was the lawyer not the client that hired or brought in the agent/third party"). But the cases she cites do not stand for that proposition, and the D.C. Circuit has made clear that "[w]here the client is an organization, the privilege extends to those communications between attorneys and all agents or employees of the organization who are authorized to act or speak for the organization in relation to the subject matter of the communication." Mead Data Cent., Inc. v. U.S. Dep't of Air Force, 566 F.2d 242, 253 (D.C.Cir.1977) (emphasis added); see also Murphy, 233 F.R.D. at 438 (affirming Magistrate Judge's finding that intermediary doctrine "applies to agents of the client as well as agents of the attorney" for purposes of the attorney-client privilege), citing In re Lindsey, 158 F.3d 1263.
Plaintiff also argues that because "the Magistrate conclude[d] that Sunrise was hired by Arrowood for the business purpose of debt collection," the attorney-client privilege requirement "that legal advice be sought `from a professional legal advisor in his capacity as such' has not been met" as between Arrowood and Sunrise. Pl.'s Objs. at 7. The Magistrate Judge never reached such a conclusion. See Mem. Op. (July 31, 2015) at 8 ("Arrowood hired Sunrise for the limited purpose of finding an attorney to help Arrowood collect plaintiff's debt."). And even if plaintiff were correct about why Sunrise was originally hired, her assertion does not affect the Magistrate Judge's finding that defendant was hired as an attorney by Sunrise on Arrowood's behalf.
Plaintiff devotes a considerable number of pages in her objections to arguing that Sunrise's communications with Arrowood cannot be subject to the attorney-client privilege for a multitude of reasons, including that Sunrise was acting as a debt collector and not a forwarder, that it was engaging in illegal business practices, and that Arrowood had no reasonable expectation of confidentiality in its communications with Sunrise, who plaintiff repeatedly
The Magistrate Judge's comparison of the E.I. du Pont case to the facts underlying the instant dispute demonstrates why this distinction is significant. See Mem. Op. (July 31, 2015) at 8-9, citing 718 A.2d at 1141-42. In that case, DuPont, the plaintiff corporation, referred a debt-collection action to its in-house legal department, which then hired Kaplan, a collection agency, which in turn hired Peck, an attorney, to collect the debt owed to DuPont by Forma-Pack, the debtor. E.I. du Pont, 718 A.2d at 1132. Forma-Pack sought to depose and obtain documents from Kaplan, and DuPont moved for a protective order on the grounds that the communications between its in-house legal department and Kaplan were subject to the attorney-client privilege. Id. The Maryland Court of Appeals summarized the relationship of the parties as follows:
Id. at 1141.
The Court of Appeals concluded that "no attorney-client relationship existed" between DuPont's legal department and Kaplan and that therefore, their communications were not protected by the privilege, because "[w]hen DuPont, the corporate client, consulted with its attorney, the legal department, it was not doing so for legal advice regarding the Forma-Pack debt," but instead "was simply routing the debt collection matter to its legal department, which in turn was to transmit it to an outside, non-lawyer collection agency." Id. at 1141-42. And it found that "when DuPont hired Kaplan it was not for the purposes of instituting legal action; instead, DuPont was consulting with Kaplan in a business capacity, for the typical business purpose of collecting a debt." Id. at 1142. The court also noted that because "Kaplan is not authorized to practice law, there is no possibility of DuPont's legal department claiming that it is the client and Kaplan is the attorney, via Peck as its subagent, for purposes of establishing the attorney-client privilege." Id. at 1141 n. 5. It emphasized that a "critical fact is that Kaplan, the party from whom discovery is being sought ... is not asserting the attorney-client privilege." Id. at 1141.
In contrast, plaintiff here is not seeking communications between the creditor-client (Arrowood), and the collection agency (Sunrise); she is seeking communications between the attorney (defendant) and the collection agency (Sunrise), made on behalf of the creditor-client (Arrowood). The Magistrate Judge specifically found that when Sunrise hired defendant on Arrowood's behalf, it was not "in a business capacity," as the plaintiff's use of its in-house counsel was in E.I. du Pont; it was for the specific purpose of obtaining legal
Finally, plaintiff also insists that the Magistrate Judge erred in concluding that the alleged unauthorized practice of law by Sunrise was not relevant to the application of the attorney-client privilege. Pl.'s Objs. at 22-24. She argues that "Sunrise engaged in fraud by practicing law without a license and the communications at issue were made in furtherance of the fraud and thus are not privileged." Id. at 23. On that point, the Magistrate Judge found that, "[a]ssuming without deciding that Sunrise engaged in the unauthorized practice of law, plaintiff fails to explain why such wrongdoing by Sunrise should serve to waive or eliminate Arrowood's attorney-client privilege." Mem. Op. (July 31, 2015) at 9. The Court agrees — plaintiff offers no legal authority to support her contention that Arrowood's attorney-client privilege with defendant could be voided by Sunrise's unauthorized practice of law. See Pl.'s Objs. at 22-24. Thus, she has failed to show that the Magistrate Judge committed a clear error or that his decision was contrary to law, and her objection on this ground will be overruled.
The Magistrate Judge also determined that the two documents over which defendant asserted the work-product privilege "were made because of the prospect of litigation against plaintiff," and that plaintiff had not made a showing of need which would permit discovery of those documents because she "made no attempt at showing need for these documents" in her response to defendant's revised privilege log. Mem. Op. (July 31, 2015) at 13. Plaintiff objects that "[t]here is no work product immunity because Arrowood never sought Defendant's services to bring a lawsuit against the Plaintiff, litigation was not imminent and no lawsuit was ever brought." Pl.'s Objs. at 25. She contends that the alleged work product documents were not prepared in anticipation of litigation, but as part of a "strategic decision by the Defendant to file a lawsuit against Plaintiff in an effort to gain leverage for itself in the instant lawsuit." Id. at 26.
But once again, plaintiff's objections are based solely on her disagreement with the Magistrate Judge's factual and evidentiary findings that defendant proffered sufficient support for its claims of work-product protection and that the documents in question were prepared in anticipation of legal action. Id. at 25 ("[Defendant] has only produced hearsay by way of documents purporting to be contracts along with its self-serving interpretation of said hearsay.... the Defendant has not met its burden."); id. at 26 ("Defendant has not produced any evidence proving that Arrowood, as oppose [sic] to Sunrise, intended it to file a lawsuit against Plaintiff or that a lawsuit against Plaintiff was imminent."). Instead of offering any contrary evidence or legal authority that would show that the Magistrate Judge's findings were clearly erroneous or contrary to law, plaintiff simply speculates as to the implications of defendant's pay structure and its motives in initiating legal action against plaintiff. Id. at 25-26. These unsupported and conclusory allegations fail to leave the Court
Plaintiff also objects to the Magistrate Judge's June 29, 2015 Order, in which he denied plaintiff's request for attorneys' fees and costs for the litigation of the discovery disputes. Pl.'s Objs. at 26-27.
At the outset, the Court questions whether plaintiff's challenge to this aspect of the Magistrate Judge's ruling is timely. Written objections to a magistrate judge's ruling must be filed "within 14 days after being served with the order of the magistrate judge." LCvR 72.2(b). Plaintiff was electronically served with the Magistrate Judge's opinion when it was docketed on June 29, 2015, meaning that any objections to that order would have been due by July 13, 2015. Plaintiff's objections were not filed until more than a month later.
Plaintiff contends that because "the June 29th Order was interlocutory and the July 31, 2015 Order was the final Order for purposes of filing Plaintiff's objections, said objections are timely as to both Orders." Pl.'s Objs. at 1. But nothing in the June 29 Order supports plaintiff's contention that it was not final. The Magistrate Judge specifically ordered "that each side shall bear its own costs related to plaintiff's motion to compel," and he held in abeyance only that portion of plaintiff's motion to compel which related to "defendant's claims of privilege and as to plaintiff's document request number 25." Order (June 29, 2015) at 3-4. In other words, the only issue left for determination after June 29 was the validity of defendant's assertions of privilege; plaintiff's fee request had already been ruled upon and the Magistrate Judge found that she was not entitled to compensation for the motion to compel. Id. Accordingly, plaintiff's objections to the June 29, 2015 Order were not timely, and the Court could overrule them on that ground alone.
And in any event, plaintiff has not shown that the decision to deny her attorneys' fees and costs was clearly erroneous or contrary to law. Plaintiff contends that her motion to compel "result[ed] in the Magistrate ordering the Defendant to produce most of the information requested by plaintiff," and that she therefore "is entitled to her expenses and attorney fees" pursuant to Federal Rule of Civil Procedure 37(a)(5)(A). Pl.'s Objs. at 27. That rule provides that "[i]f the motion is granted ... the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees." Fed.R.Civ.P. 37(a)(5)(A) (emphasis added). But the mandatory language of Rule 37(a)(5)(A) is clearly not applicable to the instant motion to compel, which the Magistrate Judge only granted in part. See Order (June 29, 2015); see also Order (July 31, 2015). Rather, the relevant rule is Rule 37(a)(5)(C), which states that, "[i]f the motion is granted in part and denied in part, the court ... may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion." Fed. R.Civ.P. 37(a)(5)(C) (emphasis added).
So plaintiff's claim that she is "entitled" to fees under Rule 37(a)(5)(A) is simply incorrect as a matter of law, as her
Furthermore, there has already been a sizeable fee awarded in this case for a $1,001.00 recovery on a federal claim. See Order (Jan. 6, 2015) [Dkt. # 54] (granting plaintiff $41,989.80 in attorneys' fees); see also Minute Order (Mar. 11, 2015) ("The Court wishes to underscore the fact that the fee issue has since been resolved, and the sole remaining claims in this case arise under District of Columbia law and not the federal statute with the mandatory fee provision."). In the Court's view, the tail has been wagging the dog for some time in this case, and awarding more fees for the unduly contentious and overly lengthy pleadings that have proliferated on this docket is not warranted.
For those reasons, plaintiff's objection to the Magistrate Judge's finding that plaintiff was not entitled to attorneys' fees and costs for the litigation of the motion to compel is overruled.
Because plaintiff has not demonstrated that the June 29, 2015 and July 31, 2015 Orders regarding the application of the attorney-client and work-product privileges and plaintiff's entitlement to attorneys' fees and costs were clearly erroneous or contrary to law, plaintiff's objections are hereby
The DeVetter case can be distinguished from the present situation. In DeVetter, the plaintiffs initially hired the intermediaries to provide them with financial advice and services. Id. at *4. After the fund the financial advisors oversaw suspended all redemptions, the plaintiffs then asked the advisors to "assist them in retaining counsel to investigate the Fund's alleged failure and with respect to any claims [the] Plaintiffs might assert against the Fund." Id. But here, neither the intermediary nor the law firm was performing a business or a mixed function. The Magistrate Judge determined that Sunrise's role was solely that of an intermediary between Arrowood and the defendant law firm, that Sunrise was hired with the exclusive goal of "obtaining legal advice from defendant," and that defendant was acting only in a legal capacity during the relevant communications. See Mem. Op. (July 31, 2015) at 8 ("[D]efendant provided its legal services for the benefit of Arrowood."); see also, e.g., Black & Decker Corp. v. United States, 219 F.R.D. 87, 91 (D.Md.2003) (rejecting claims of attorney-client privilege based on intermediary doctrine where the third-party accounting firm's primary role was "providing hybrid advice to plaintiff — tax and business advice which by its nature, had a legal component," but which was not "primarily to assist the plaintiff's attorneys in rendering legal advice"). So while the DeVetter opinion — assuming it was correctly decided — does not directly support the Magistrate Judge's ruling, given the weight of other applicable authority and the evidentiary record in this case, the Court does not find that the reliance on DeVetter renders the Magistrate Judge's decision clearly erroneous.