MEMORANDUM DECISION AND ORDER INTRODUCTION

B. LYNN WINMILL, Chief District Judge.

The plaintiff Stewart Title has submitted 141 documents to the Court for an in camera inspection to determine if the documents are protected by the attorney/client privilege. Both parties have submitted briefing on the issue. For the reasons explained below, the Court finds that portions of the documents are protected by the privilege while other portions must be produced. The Court sets forth its decision in detail below.

BACKGROUND

This discovery dispute started when defendant Credit Suisse filed a motion to compel the production of documents containing communications between Stewart Title and its counsel at the law firm of Faegre Benson. Stewart Title objected, claiming that the documents were protected by the attorney/client privilege and the work product doctrine. The Court issued a decision finding the work product doctrine inapplicable, and giving counsel direction on the claims of privilege. The Court relied on the recent decision in Cedell v. Farmers Insurance Co. of Washington, 295 P.3d 239 (Wash.Sup.Ct. 2013). Adopting that holding, the Court presumed that the entire file was not protected by privilege and required Stewart Title to show how the privilege applied to each document it sought to protect. The Court ordered Stewart Title to produce all of the challenged documents that deal primarily with the factual investigation of the lien claims and those that discuss both coverage and factual matters. In instances where there was a close question regarding the privileged content of the documents to be produced, the Court directed Stewart Title to submit the documents to the Court for in camera review.

Pursuant to the Court's Order, Stewart Title produced hundreds of documents to Credit Suisse, and also submitted 141 pages of documents to the Court for in camera review.

ANALYSIS

In the supplemental briefing, Credit Suisse pointed out that it has a fraud claim against Stewart Title. Credit Suisse claims that Stewart Title had a secret plan devised in the early fall of 2010 to deny coverage for the Banner liens, some of the largest at issue, but not tell Credit Suisse until after the state court ruled on the validity of that lien claim. According to Credit Suisse, that allowed Stewart Title to "exploit for itself the `negotiating leverage' created by the timing of trial and the uncertainty of settlement with Banner II (the general contractor) [to settle claims that were clearly covered]." See Supplemental Brief (Dkt. No. 107) at p. 5. Stewart Title adamantly denies this claim, but it presently exists in the case and provides a legitimate basis for discovery.

There is no privilege for documents "sufficiently related to" allegations that the client is engaged in a fraudulent scheme while seeking the advice of an attorney. See In re Napster Inc. Copyright Litig., 479 F.3d 1078, 1090 (9th Cir. 2007), abrogated on other grounds by, Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009). The best evidence of the fraud "is likely to be in the hands of the party invoking the privilege" and hence is discoverable. Id.

This analysis gives the Court further guidance for its in camera review. The Court will order the production of documents (1) that are sufficiently related to Credit Suisse's fraud claim that Stewart Title decided in the fall of 2010 to deny the Banner liens, and (2) that relate to Stewart Title's investigation and evaluation of the lien claims. The following table contains the Court's rulings at to each document reviewed in camera. The page numbers include the entire document submitted, although in most cases Stewart Title is claiming that only the yellow highlighted portions of those documents are privileged. In some instances, for a single multi-page document, the Court has decided to compel production of some pages and/or paragraphs and order the redaction of other pages and/or paragraphs.

The Court's decisions set forth in the table below relate to the yellow highlighted material contained in the particular document referenced.

Conclusion

In its earlier decision, see Memorandum Decision (Dkt. No. 81), the Court ruled on Credit Suisse's motion to compel by granting it in part and reserving a decision in part pending this in camera review. Now that the in camera review has been completed, the Court will grant the motion in part and deny it in part in accordance with the rulings made above.

Stewart Title is directed to make the redactions noted above and produce the material immediately to Credit Suisse.

ORDER

In accordance with the Memorandum Decision set forth above,

NOW THEREFORE IT IS HEREBY ORDERED, that the motion to compel (docket no. 61) is GRANTED IN PART AND DENIED IN PART in accordance with the rulings made above.