VERONICA L. DUFFY, Magistrate Judge.
This diversity matter is pending before the court on the complaint of plaintiff SPV-LS, LLC.
The district court, the Honorable Lawrence L. Piersol, referred the motion to this magistrate judge for decision.
A thumbnail sketch of the facts of this action, recited only to provide context for discussion of the discovery disputes, is as follows. Nancy Bergman, a school teacher of modest means, obtained a $10 million life insurance policy on herself from defendant Transamerica Life Insurance Company and placed that policy into the N. Bergman Insurance Trust dated December 18, 2006.
Nancy also apparently obtained a $5 million insurance policy on her life from another insurer, Sun Life Assurance Company, and also placed that policy into a trust. That policy is not part of this District of South Dakota litigation. Separate litigation concerning the Sun Life policy is pending in the District of New Jersey.
Regarding the Transamerica policy at issue in this litigation, in 2009, Nachman is alleged to have sold the insurance policy from the N. Bergman trust to FLS. After the sale, FLS discovered that the premiums on Nancy's life insurance policy had not been paid. It also discovered that Nachman's representations that Nancy was on death's doorstep were inaccurate. Nachman, for his part, denies that he ever entered into these transactions with FLS, suggesting an imposter posing as Nachman dealt with FLS. He claims someone forged his signature to the pertinent sale documents involving FLS.
FLS brought suit against the trust in federal district court for the Eastern District of New York. Default was entered against the trust because it never answered. Thereafter, an auction of Nancy's life insurance policy was held in 2012. FLS bought the policy at the auction for $1.19 million. FLS then transferred the policy to the plaintiff herein, SPV-LS, LLC.
On April 6, 2014, Nancy died. Thereafter, both SPV-LS, LLC and Malka Silberman on behalf of the trust, submitted claims to Transamerica for the policy proceeds. SPV-LS, LLC brought this suit against Transamerica in this court, alleging a claim of breach of contract. Transamerica interpleaded the policy proceeds and sued Nachman, Ms. Silberman, Nancy's estate, and other third-party defendants, alleging that Transamerica was unable to determine which of the claimants was legitimately entitled to the proceeds of the policy.
A series of lawyers in New York have allegedly represented the trust, though Ms. Silberman now claims she never hired these New York lawyers. In this litigation, a succession of lawyers have made appearances on behalf of Ms. Silberman. First attorneys Pamela Reiter and Ronald Parsons appeared. They withdrew after thirteen months. Then after a month's lapse, Matthew Dorothy appeared. Mr. Dorothy withdrew less than five months later. Andrew Citron of New York purported to represent Ms. Silberman and communicated with counsel for other parties in that capacity (
A number of subpoenas duces tecum were issued to lawyers in connection with the litigation surrounding the life insurance policies on Nancy Bergman. In the New Jersey litigation, the attorneys for Sun Life served Sioux Falls attorney Pamela Reiter (fka Bollweg) with a subpoena duces tecum requesting documents relating to any life insurance policy on Nancy Bergman's life.
In this litigation, the Krasnerman Entities served subpoenas duces tecum on three New York attorneys, Nelson Bloom, Stuart Davis, and Andrew Citron, who either had previously represented Malka Silberman or the N. Bergman Trust, or who were alleged to have done so.
The Krasnerman Entities also served Sioux Falls attorneys Matthew Dorothy and Alan Peterson with subpoenas duces tecum. Those two attorneys voluntarily complied with the subpoenas, asserting attorney-client privilege and work product doctrine arguments as to only a portion of the documents requested in the subpoenas. The Krasnerman Entities filed motions to compel further compliance with those subpoenas.
The Krasnerman Entities also served Pamela Reiter and Ronald Parsons with the subpoenas duces tecum which are the subject of the instant motion to compel. Ms. Reiter and Mr. Parsons served as counsel of record for third-party defendants Nachman Bergman and Malka Silberman in this case from September 25, 2014, until October 20, 2015.
Rule 45 of the Federal Rules of Civil Procedure provides the procedure for serving subpoenas on nonparties.
Rule 45 specifies what is required if a party withholds subpoenaed documents under a claim that it is privileged or subject to protection as trial-preparation material.
Attorneys Reiter and Parsons were served with identical subpoenas. They did not produce any documents in response to the subpoena. They did, however, in a joint objection to the subpoena, provide a privilege log. That log consists of a list of 19 separate documents together with a name of each document, the recipient of each document, the date of each document, and the objection to producing each document. Every one of the 19 documents listed has the exact same objection listed: "attorney-client privilege, work product, client confidentiality."
Two of the items listed in the privilege logs are payments to the Johnson Law Firm from First Bank and Trust dated October 14, 2014, and May 15, 2015.
The retainer agreement was sent to clients Malka Silberman and Nachman Bergman on September 24, 2014. The court believes it highly unlikely in the extreme that any attorney trial strategy or research or anything else remotely akin to attorney work product is reflected in this document. "Client confidentiality" is not a valid basis for refusing to produce otherwise relevant discovery. That leaves attorney-client privilege as a potential basis for withholding the retainer agreement.
In a diversity case such as this, state law controls the question of attorney-client privilege.
Here, Ms. Reiter and Mr. Parsons have not carried their burden of showing why their retainer agreement comes within the purview of the attorney-client privilege instead of coming within the purview of the normal rule that fee agreements are generally not privileged. The retainer agreement must be produced pursuant to the subpoena.
Invoices, like fee agreements, are generally not protected by the attorney-client privilege.
While questions of attorney-client privilege in diversity actions are controlled by application of state law, the application of the attorney work product doctrine is controlled by federal law.
Here, Ms. Reiter and Mr. Parsons have asserted the entirety of each of their invoices fall within the work product doctrine. However, that doctrine cannot shield the entirety of those invoices. Entries on the invoices which do not reveal any attorney trial strategy or recommendation are not protected.
The court orders the invoices listed in the privilege log to be produced. However, Ms. Reiter and Mr. Parsons may make redactions from their invoices pursuant to the work product doctrine if a particular entry on the invoice reveals their thought processes and strategy. A privilege log must be provided for all redactions, one that is not conclusory and identical as to each such redaction.
Based on the foregoing law, facts, and analysis, the court hereby
ORDERS that the motion to compel [Docket No. 255] filed by Plaintiff and third-party defendants Life Trading Trust, Financial Services, LLC, and SPV II LLC is granted in part and denied in part as follows:
1. Attorneys Reiter and Parsons shall, within 15 days from today's date, provide the bank records listed at the bottom of their privilege log to the Krasnerman Entities. Account numbers and other sensitive data may be redacted.
2. Attorneys Reiter and Parsons shall, within 15 days from today's date, provide their retainer agreement to the Krasnerman Entities.
3. Attorneys Reiter and Parsons shall, within 15 days from today's date, provide their invoices to the Krasnerman Entities. Ms. Reiter and Mr. Parsons may make any partial redactions necessary to shield their trial strategy and recommendations that are reflected in discrete entries on the invoices. A privilege log shall accompany the invoices that individually addresses each redaction.
Pursuant to 28 U.S.C. § 636(b)(1)(A), any party may seek reconsideration of this order before the district court upon a showing that the order is clearly erroneous or contrary to law. The parties have fourteen (14) days after service of this order to file written objections pursuant to 28 U.S.C. § 636(b)(1)(A), unless an extension of time for good cause is obtained.